Locals must own oil blocks

A Local Content Consultant, Mr. Kwame Jantuah, has said that taking control of oil fields and blocks as a way of increasing local participation should not be limited to the Ghana National Petroleum Corporation (GNPC).

While commending government’s effort to make the GNPC an operator in the industry, Mr. Jantuah said it is not enough to ensure maximum Ghanaian participation.

Opportunities, he said, should be given to local companies to merge and be able to bid for oil and gas contracts -- otherwise IOCs will crowd out local companies.

“I don’t think it is only GNPC who should do that. I think it should be opened up for Ghanaians who are interested in getting oil fields and blocks to also go into it, because I think we have capable Ghanaians out there who can equally do what Tullow is doing,” he told B&FT on the sidelines of a consultative forum organised by the Ministry of Trade and Industry and the Africa Development Bank in Accra.

“The individual cannot do it on his own: if we don’t start investing in our people then it is going to be very difficult for SMEs to go out there and do what they are expected to do in the industry.”

A certain portion of the industry, he said, should be dedicated to Ghanaian SMEs to enable them to make meaningful inroads into the industry.

“If we are to dedicate a certain portion of the industry to Ghanaians alone, Ghanaians will build capacity; Ghanaians would now produce the oil, some of that money will stay in our banks, and our banks would be able to support industry better,” Mr Jantuah said his reference to a portion of the industry being dedicated to Ghanaians includes “the whole spectrum”, but that the Keta Basin would be a good place to start.

“If not the Keta Basin, then onshore. If onshore is dedicated to Ghanaians alone -- and when I say dedicated to Ghanaians alone it doesn’t mean that Ghanaians can’t partner with foreign companies to do the job -- Ghanaians should be the lead in exploring that portion and it is Ghanaians who have the contracts; when the contracts are written they are written in the name of Ghanaians, not in the name of a foreign company. That is how you can now start building capacity both financially and technically for Ghanaians.”

To ensure the country’s local industries benefit from oil and gas contracts, Mr. Jantuah said the responsibility must be collective. A lot of research, he said, needs to be done where SMEs are concerned, so that they can also find a niche within the whole mix of what government is trying to do. “It is not an individual thing. We should not take it as only government responsibility.

The responsibility also lies on the company that is interested in the industry. Until we have a good balance of the two, we are going to find it is the big IOCs coming in and doing the job.”

Concerns of stronger local participation have been on the increase across Africa now that the continent has been confirmed as holding enormous hydrocarbon resources.

Efforts in Nigeria to boost local participation has seen that country’s national oil company and a local consortium set to take over an oil block operated by Shell.

French News Agency AFP reported that the block had been owned by a joint venture with state oil firm NNPC holding 55 percent; Shell a controlling 30 percent; French firm Total 10 percent; and Italy's Agip, a unit of ENI, five percent.

“The taking-over of oil mining lease 34 by the Nigerian National Petroleum Corporation (NNPC) and ND Western from Shell, Total and Agip are part of measures to grow the in-country upstream capacity of the petroleum industry," a statement from the state oil firm said.