The Petroleum Commission explained that most local companies lack capacity and are therefore failing to meet basic requirements that would enable them participate in the sector.
This was disclosed at a training workshop organised by the Commission to address the Challenge.
Head of Special Services at the Commission Kweku Boateng said although some of the local companies are doing quite well in the sector, a lot more could be done to increase participation.
Petroleum (Local Content and Local Participation) Regulations, 2013 (6) indicates that “a non-indigenous Ghanaian company which intends to provide goods or services to a contractor, a subcontractor, licensee, the Corporation or other allied entity within the country shall incorporate a joint venture company with an indigenous Ghanaian company and afford that indigenous Ghanaian company an equity participation of at least ten percent.”
In successfully meeting this and other requirements, most international companies do their own due-diligence in the area of legal, corporate governance, management systems, etc before partnering local companies – an exercise most local companies usually fail to make the mark. The Commission is therefore worried this could threaten the country’s dream of indigenizing the oil and gas sector – ensuring that local companies dominate.
Meanwhile some local players in the sector have challenged the Petroleum Commission’s assertion that they lack capacity.
For instance Strategy and Business Development Manager of the Research Development and Finance Consultants Ltd, Nana Owusu Odoom tells Joy Business lack of clarity in respect of the requirements is rather the problem.
“Once you understand the terms and are satisfied with the conditions that go with the terms and enter into such a joint venture then you are comfortable it will work out. But usually lack of clarity leads to most of the JVs falling aside.”