Ghana has warned the Government Uganda against dealing with oil companies with a “poor attitude” to local content.
The director of finance and administration at the petroleum commission of Ghana, Vincent Yankey, advised Uganda to instead look for companies with a “good attitude” to local content for award of production licenses for exploration blocks.
Uganda has so far issued one production license to China National Offshore Oil Corporation (CNOOC) for Kingfisher well in Hoima district.
The company is currently engaged in preliminary activities ahead of oil production expected to begin between 2017 and 2018. The Government is currently studying 10 applications for production licenses for various exploration blocks from Tullow and Total.
Yankey, who was speaking at the first consultative dialogue for Uganda’s draft national content policy and plan at Serena hotel in Kampala, recently also advised Uganda against awarding long contracts to companies so as to facilitate participation of many companies in the petroleum sector.
Government officials and representatives from the World Bank and Norwegian Embassy later held closed door discussions about the draft policy and plan.
The mining and telecommunication sectors in Ghana, Yankey explained, have been “taken over by foreigners” yet there are competent Ghanaians because government did not put in place a national content policy in time.
He, however, said a national content policy for the petroleum sector favours the local population.
“We are added through employment and transfer of knowledge and technology,” Yankey said.
The number of people employed in the upstream sector (exploration, development and production) in Ghana, he said, is estimated at 6, 929. Of these, Yankey said, 5,589 (80%) are Ghanaians while expatriates account for 1,340 (20%).
International oil companies, he added, employ 3, 616. Of these, 1,301 (36%) are expatriates while 2,315 (64%) are Ghanaians. The indigenous companies, he said, have employed 1,973 people. But the lack of requisite skills among Ghanaians, he noted, has been a challenge to the Government’s efforts to ensure the population gets a lion’s share from the petroleum industry.
Ghana discovered oil in 2007, a year after Uganda found the resource in 2006. The West African country began commercial oil production in 2010 from its Jubilee field that was producing 110,000 barrels of oil per day by last year. Production, according to Yankey, is expected to reach 200,000 barrels per day with the commissioning of 10 fields by 2025.
The Norwegian ambassador to Uganda, Thorbjorn Gaustasaether said Uganda should not enact a policy that will stand in the country’s way to tap foreign resources, capacity and competence.
The minerals state minister, Peter Lokeris said Uganda will carry out consultations with various oil producing states and players in the industry in order to come up with a good policy that shall be tabled before cabinet for approval in June.
Ugandans lack necessary skills
By the end of 2013, CNOOC, Total and Tullow had a work force comprised of 60%, 70% and 80% Ugandans respectively. This is according to the Petroleum Exploration and Production Department.
The findings of a recent baseline industry survey indicated that besides engineering, construction, goods and services provision, other categories of man power might be outsourced due to lack of requisite skills among Ugandans.
The Government plans to boost the Uganda Petroleum Institute and Kicwamba technical institute to produce professionals with the necessary skills for the petroleum industry.
The development stage, according to the report, will produce between 11,000 – 15,000 direct jobs and between 100,000 – 150,000 indirect and induced jobs. Out of the total manpower required, 15% will be engineers and managers, 60% will be technicians and craftsmen, and 25% will be casual workers.