Ghana News – Local businesses asked to form joint ventures to win oil contracts
The Enterprise Development Center has observed local businesses are not winning service contracts from International oil companies due to inadequate and inappropriate environmental health and safety measures.
The development comes in the wake of implementation of local content law which compels multi-national oil companies to reserve some service areas for indigenous businesses.
Project Coordinator, Gamely Kumasi, says little progress has been made because most businesses are unwilling to cooperate.
“Most of them don’t have the right capacity to compete for contracts with the IOCs. They must recognize that they have to overcome some of their deficiencies”. Mr. Kumasi has said.
After five years of oil production, only a few local businesses have won contracts because many fall short of set standards.
Most local companies are unable to win contracts because they fall short on environmental health safety policy, standards and procedures, among others.
“The International Oil Companies want to know who is in charge of EHS and who does he report to and what goes into it”, says Mr. Kumasi.
The LI 2204 defines services that can exclusively be performed by local companies as part of the local content promotion.
But if these companies do not meet the quality standards, the IOCs could make a case to the petroleum commission.
Mr. Kumasi wants local businesses to form joint-ventures to be able to benefit.
“There is the need for businesses to form business associations and partnerships because where you don’t have the resources and personnel, you could identify a partner, come together and be resourced enough to be positioned competitively to submit very good proposals”. He said.
The Minister for Petroleum, Emmanuel Kofi Boah is challenging suggestions that the benchmark is discouraging local businesses.
According to him, local companies must abide by the provisions in the law.