Energy Minister Summons Oil Coys

By

J. Ato Kobbie, Managing Editor

Service

providers in Ghana’s oil and gas sector have been summoned to a stakeholders

meeting on 9th November this year, to reason towards increasing

Ghanaian content and participation in the oil and gas sector, in line with

Government policy.

Confirming

news of the impending meeting to The Business Analyst in Accra on

Tuesday, Deputy Minister of Energy in charge of Petroleum, Hon. Emmanuel

Armah-Kofi Buah, says this is the first step towards working with stakeholders

in the sector to understand that this is of critical importance to government.

“It’s

a priority and we’ll be checking on each company to see that they have well

thought-out programmes to ensure that ultimately the people of Ghana are

participating actively in this oil and gas sector,” he assured, adding: “that

is really going to be the focus.”

“President John Evans

Atta Mills has said that the oil and gas find must be a blessing and not a

curse and this must be so in a lot of ways and the critical area of making sure

that the people of Ghana participate in this industry also comes into play,” he

noted.

The invitation comes amidst reports of Ghanaians being

sidelined in recruitment by service providers in the sector, to the benefit of

other nationals, while consultations over a legislation to give legal backing

to a local content policy already approved by Cabinet continues.

“We are getting a lot

of complaints from various stakeholders, especially, from the Rig Workers’

Association, of companies not living up to expectations with the way they are

employing Ghanaians; the way they are not focusing on training programmes to

make sure Ghanaians participate fully; the way to open up opportunities for Ghanaians

who want to set up companies in this industry,” a worried Mr. Buah stated.

Some of the 26 service companies that have been invited to

the meeting are Seaweld Engineering Ghana Limited, Menergy International Ghana

Ltd, MEA Catering Services Ltd., Transocean Offshore International Ltd, Ghana,

Schlumberger Technical Services Inc, Oceaneering International Services Ltd and

MODEC Ghana Ltd.

The

local content policy was carved in recognition of the limited capacity of the

local people to participate in the Oil and Gas sector in the areas of

technology, finance and human resources for which reason “the involvement of

expatriates in some specific areas would be necessary.”

Section

5.1 of the policy document, sub-titled Mandatory Local Content in Oil and Gas

Development,

requires that ‘All operators, contractors, sub-contractors and any other

entities involved in any project, operations, activity or transaction in

Ghana’s Oil and Gas Industry shall incorporate local content as an important

element in their project development and management philosophy for project

execution. Every project, operation,

activity or transaction must have or form part of a Local Content Plan. Such a Plan

shall include all aspects of the

Local Content framework discussed in this document and shall be assessed and

revised at regular intervals, as appropriate.”

The

policy, which has since been approved by Cabinet, seeks to holistically empower

Ghanaians through their progressive involvement in the oil and gas sector.

The policy therefore identifies stakeholders and their roles,

the urgent need for capacity building and training, technology transfer and its

indigenization; infrastructural development; creation of a conducive and

thriving environment for optimum local participation; and integration of the

Oil and Gas sector into the long term national development plan.

The

policy was formulated after a nation-wide consultation and recognizes the

potential for accelerated development that a well-managed oil economy can give

as well as the socio-political unrests that perceived or real inequitable

distribution of the benefits of the resource brings, especially as it is a

non-renewable resource.

Local

content refers to the quantum/percentage of locally produced materials,

personnel, financing, goods and services rendered to the oil industry and which

can be measured in monetary terms.

Local

Participation, however, refers to the level of Ghanaian Equity Ownership.

Under

the policy, oil companies are required to achieve “at least 90 percent local

employment and in-country spend in the oil

and gas industry value chain within a decade of the start of every petroleum

license or contract, in the provision of such supplies and services that are

determined by the LCC to be of high priority to Ghana.”

Licenced companies

are required to also “develop local

capability in all aspects of the oil and gas value chain through education,

skills and expertise development, transfer of technology and know-how and an

active research and development portfolio”.

Additionally, the

policy seeks to Maximize the

“value-addition and job creation, through the use of local expertise, goods and

services, businesses and financing in the oil and gas industry value chain and

the retention of benefits within Ghana.”

Capacity building

for international competitiveness of domestic businesses and industrial sectors

is also required of these companies.

According to the

policy document, “In

order to ensure increased financial benefits to Ghanaians, and the Ghanaian

state, all operators in the oil and gas industry, shall as far as practicable

use goods and services produced or provided in Ghana for their operations in

preference to foreign goods and services.

The Operators shall give priority to the purchase from citizens of Ghana,

local products and services that are competitive in terms of price, quality and

timely availability. A preference for Ghanaian entities, even if they are

more expensive is mandated, all else being equal. The World Bank domestic

preference percentage or 10 percent price increment will be used as the

preference ceiling, whichever is greater.

“Standards and certification applied to

the provision of goods and services shall be in accordance with guidelines of

the Ghana Standards Board.”

Again,

it requires that “Where bids are being evaluated, and where bids are

otherwise equal, the bid containing the highest level of local content shall be

selected.”

On the

status of the legislation that would give legal backing to the Local Content

Policy, Mr. Buah said the draft has been forwarded to the various agencies in

the ministries for their inputs.

“We are

going to engage the people of Ghana on this draft to make sure that we have

really listened to all stakeholders, including the oil and service companies,

so that at the end of the day, we are going to have a progressive local content

policy that ensures that the people of Ghana win in this industry,” Mr. Buah

stressed with reference to the draft legislation that is to give backing to the

local content policy. j.atokobbie@yahoo.com

J. Ato Kobbie Managing EditorThe Business AnalystP. O. Box GP 4902AccraCell: 23324

313 9680; 233 261 489489 E-mail:j.atokobbie@yahoo.com

thebusinessanalystgh@gmail.com