Local Content In Focus

By Agnes Chukwu [News Editor, The Business Analyst]

Various stakeholders and key players at the just ended Ghana Summit on oil and gas, deliberated on a number of issues, including Local Content development in relation to the industry, enumerating the developments, policies as well as the challenges faced by this industry in Ghana.
Local Content and participation according to the Ministry of Energy’s Local Content and Local Participation framework Policy, refers to the level of use of Ghanaian local expertise, goods and services, people, businesses and financing in oil and gas activities.

In a presentation on “Implementing Local Content in Ghana,” Afua Amissah, the Local Content Project Coordinator at the Ministry of Energy, disclosed that under the Ministry’s policy, all regulatory authorities, operators, contractors, sub-contractors and any other entities involved in any project, operations, activity or transaction in Ghanaian Oil and Gas Industry shall consider local content as an important element in their project development and management philosophy for project execution.

It further states that every project, operation, activity or transaction must have an Annual 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 annually. The implementation of the Local Content philosophy shall ensure measurable and continuous growth of Ghanaian participation in all aspects of the operations.

She further added that the Policy Framework states Government’s commitment to ensuring Ghanaian citizens participate in the ownership of businesses in the oil and gas industry. In this regard, the policy objective is to give first consideration to Ghanaian independent operators in the award of oil blocks, oil field licenses, oil lifting licenses and in all projects for which contract is to be awarded in the Ghanaian oil and gas industry, save that they must fulfill such conditions as the Minister will specify.

“In the case of non-Ghanaian ownership and operations, the entity must provide for the participation of a citizen of Ghana in an interest of at least five percent in the exploration and production activities under petroleum licenses. The interest of the citizen of Ghana shall not be transferable to a non-citizen
of Ghana,” the Policy states.

Furthermore, Ms Amissah said the Policy Framework mandates an Operator in the petroleum sub-sector to ensure that opportunities are given as far as is possible for the employment of Ghanaians having the requisite expertise or qualifications in the various levels of the operations.

“The Operator shall, within twelve months after the grant of a licence (or effective date of a Petroleum Agreement), submit to the relevant Regulatory Agency for approval, a detailed Annual Recruitment and Training Programme for recruitment and training of citizens of Ghana in all job classifications and
in all aspects of petroleum activities, which may be carried out in or outside the country,” she quoted.

Part III of the PETROLEUM (EXPLORATION AND PRODUCTION) LAW, 1984, PNDC Law 84, sub-titled Rights And Obligations Of Contractors And Subcontractors, states that a contractor or sub-contractor shall, in accordance with the Regulations and with the terms of a petroleum agreement or petroleum sub-contract, as the case may be, ensure that opportunities are given as far as is possible for the employment of Ghanaians having the requisite expertise or qualifications in the various levels of the operations.
It further stipulates that, a contractor or sub-contractor shall, as far as practicable, in accordance with the Regulations and the petroleum agreement or sub-contract use goods and services produced or provided in Ghana for his operations in preference to foreign goods and services.

Additionally, according to the Law, “a contractor or sub-contractor shall, in consultation with the Corporation, prepare and implement, in accordance with the Regulations and in accordance with the terms of any such petroleum agreement or petroleum sub-contract, plans and programmes for training Ghanaians in all job classifications and in all aspects of petroleum operations”.

Ms Amissah concluded by highlighting strategies to further enhance Local Content in the oil and gas industry, which include building local capacity of the people, providing educational support in the Universities and Polytechnics, establishing Small and Medium-Scale Enterprise (SME) Centre in the Western Region as well Monitoring and Governance.
Concerns
Responding to concerns raised after her presentation, about the need to upgrade the capacity of staff working on the oil rig, she pointed out that the Maritime University trains students on all these technicalities in order for them to be well-equipped in handling the systems.
Also, to a suggestion by a delegate from Expro that more opportunities be given to students in the second cycle institutions in order for them to be better positioned in the job market as far as the oil and gas sector is concerned, Ms Amissah said Government was working with the Technical and Vocational Institutes by drawing new time tables that will include subjects and courses in oil and gas.
The Local Content session, which was chaired by Willy Olsen, former advisor to the President and CEO of Statoil and also Senior Advisor to INTSOK, focused on local content development successes, development and training of SMEs in Ghana, Ensuring local content in oil operations in Ghana and educating Ghanaians on how to position themselves in the industry.
Other speakers on the Local Content Seminar included, Dr. Stephen Kudom Donyinah, Lecturer, Department of Chemical and Petroleum Engineering, KNUST, and Hakon Hynne, Senior Research Scientist, SINTEF.

[The print version of this article was first published in The Business Analyst of Wednesday, April 4th – Tuesday, April 10th 2012] - E-mail:thebusinessanalystgh@gmail.com