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Anxeity grips local oil and gas companies

  • SOURCE: | Editor
  • olANXIETY is growing in Ghana’s oil and gas industry, as foreign service providers in the service industry have resorted to the abrogation of services and contracts with the local companies.

    According to the Ghana Oil and Gas Service Providers Association (GOGSPA), the expatriate companies signed long-term contracts with foreign service providers before the promulgation of the Petroleum Local Content and Local Participation
    Regulations, 2013 (LI 2204), which matures next month.

    He, however, said after the passage of the regulations last year, some foreign contractors were doing everything possible to terminate sub-contrac with local firms before the LI came into effect on February 1.

    Speaking to the Daily Graphic, Mr Nuetey Adzeman, the Executive Secretary of GOGSPA, said s far four local companies had reported the withdraw of their services, while others were yet to report.

    He declined to mention the names of the four companies for fear that they might be victimised.

    He said GOGSPA had so far submitted complaint to the Petroleum Commission (PC) for further investigation.

    “The Petroleum Local Content and Local Participation Regulations, 2013 (LI 2204) were approved amid stiff opposition from foreign upstream oil and gas companies and their governments,” he said.

    After the passage of the regulations last year, some foreign contractors are reported to have done everything possible to terminate sub-contracts with local firms the LI will come into effect on February 1, 2014

    Aims of the regulation
    The regulation is aimed, among other things, at promoting value addition and job creation through the use of local expertise, goods and services,businesses and financing in the petroleum industry value chain and their retention in Ghana.

    It also places Ghanaians at the forefront of all petroleum activities and ensure that they benefit from the country’s new resource.

    The implementation of this new law is expected to ensure that the oil find benefits Ghanaians, while the foreign oil companies also get fair returns on
    their investment.

    MrAdzeman explained that the regulations were meant to, among other things, promote the maximisation of value-addition and job-creation in the petroleum sector through the use of local expertise, goods and services.

    He, however, said after the passage of the regulations last year, some foreign contractors were doing everything possible to terminate sub-contracts with local firms before the LI came into effect on February 1.

    “With that, they will say the contracts were signed before the February maturity date,” he said.

    “If the local company did not have the capacity, we will agree, but the local company, from the very onset, showed class and had been providing services
    for Modec since 2010,” he said.

    When contacted, Mr Kwaku Boateng, the Chief Executive of the PC, told the Daily Graphic that the move would not work, as there were local content targets for such companies to meet.

    “If any contactor or company wishes to act contrary to the regulations, I can assure Ghanaians that LI 2204 will be enforced to its fullest,” he said.

    The commission, he said, would ensure fairness and that the targets set by international oil companies and the service contactors would be audited to ensure that they complied with them.

    “Companies should not think that rushing to sign contracts before next month will make any difference.The regulations will catchup with all of

    The Minister of Energy and Petroleum, Mr Emmanuel Armah-Kofi Buah, told the
    Daily Graphic that the PC would ensure that the right thing was done to protect the interest of both local and foreign entities.

    He allayed the fear among investors and other players in the oil and gas sector who thought the passage of the Local Content Regulations would limit investment opportunities.

    He explained that the regulations would aid both.

    Source: Moses Aklorbortu

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