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