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Low crude oil price holds silver-lining

  • SOURCE: | Editor
  • GOGSPA LOGOThe Ghana Oil and Gas Service Providers Association (GOGSPA) says although the fall in the price of crude oil on the global market has affected the operations of the upstream oil industry negatively, it has a silver-lining that should be explored to the benefit of the country.

    “Unfortunately, the low oil prices have slowed down activities a bit, but this is also the time for companies to do other things because exploration activities will be cheaper because there will be rigs, human capital and other services available. So it depends on how you look at it,” the Executive Director of GOGSPA, Mr Nuete Adzeman, said.

    He told the Graphic Business on the sidelines of the annual general meeting (AGM) of the association (made up mainly of local

    companies supplying services to upstream oil companies) that it expected crude oil prices to rally upwards within months to bolster the activities of the industry once again.

    “We hope prices will pick up in four to five months where we expect crude will go to between US$35 and US$40 a barrel for activities to pick up again. This is what we need, else we have built capacity, but have only one production site and this will not inure to our benefit,” he stated.

    Formed about seven years ago, the association currently has about 93 corporate members. It has been vociferous in pushing the interest of local participants and is now working closely with the Petroleum Commission (PC) to assist the Ghanaian companies to participate in the middle-to high-end segment of the industry, since local capacity has been built significantly. More Ghanaian companies which operate in other jurisdictions plan to return to participate in due course.

    One of the key achievements of the association is its recognition by players and regulators of the industry as well as its membership of the Local Content Committee, which steers the implementation of the Legislative Instrument (L.I.) 2204 aimed at ensuring local participation in petroleum activities in Ghana.

    Happy with regulation

    The association is happy with the achievements by the PC so far because it has ensured that, among other things, jobs for which capacity and skills exist locally are not given to foreign companies.

    For example, the rotation system which allowed expatriates to work for 28 days, leave the jurisdiction and return after some time in order to avoid taxation has been abolished.

    The Petroleum Commission which oversees the implementation of the law has requested all international oil companies to furnish it with succession plans of how they intend to replace their expatriate staff with local hands. The IOCs???? are also supposed to outline the type of training they have earmarked for the local people as well as names of those being trained for proper monitoring.

    Although the PC is doing much, GOGSPA members want tighter monitoring on the rigs to ensure that the IOCs are living up to expectation. They stated, “slowly, we are getting there, but there is still room for improvement.”

    At the AGM

    The general meeting elected new executive into office, with Dr Douglas Zormelo, Chief Executive Officer of Zormelo and Associates, as the new President.

    Mrs Doris Ababio, Captain Francis Boakye and Messrs Emmanuel Quartey and Justice Bonney were elected to different positions.

    New President

    For his part, Dr Zormelo said the indigenisation of the petroleum industry was so crucial that all members should participate fully in the association’s activities, saying “this is the time for us to get plucked in.”

    The new president believes this is the time for creating the big entrepreneurs for the industry so they can help in creating employment for local people.

    Above all, the Dr Zormelo-led administration plans to vigorously promote the interest of the association, while building the organisational structure to make it stand the test of time.

    “We will faithfully push the Local Content Law and monitor to ensure that those entrusted with responsibilities live up to expectation. We will watch the watchman. We will also increase the visibility of GOGSPA through sensitisation and awareness creation,” Dr Zormelo stated.

    Source: http://www.graphic.com.gh/business/business-news/59317-low-crude-oil-price-holds-silver-lining.html#sthash.2PCtEGBd.dpuf

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