The Petroleum Commission has revealed to Citi Business News that it has for the past two years sanctioned about 15 companies in the Petroleum Upstream sector for violating the local Content Law.
Chief Executive of the Commission, Egbert Faibille who revealed this said the companies were sanctioned after several discussions to ensure those companies complied with the law which requires more than 50 percent of local participation in oil and gas activities in the country.
“At the compliance level, I am able to report to you that the Petroleum Commission has in the course of last year and the year before sanctioned various international service companies in the Upstream space in various ways. Some have been administrative fines, some have been rejected and faced termination of contracts,” Mr. Faibille told Citi Business News at the launch of the Ghana Upstream Petroleum Chamber in Accra.
He however declined to name the companies saying “some have acted out of ignorance and we have engaged them and seen a lot of reform on their part. So we are also mindful. We seek to ensure that all these things are done in a framework of understanding and respect and mutual cooperation rather than naming and shaming at this point. “
The Petroleum Local Content and Local Participation Regulation, L.I. 2204 was passed in 2013 to give legal backing to government to ensure that Ghanaians benefit from the rich resources directly and indirectly.
However one of the key aspect of the law which seeks to ensure that there is a minimum of 90 percent local participation in all aspects of the oil and gas value-chain is achieved by 2020 is yet to be actualized.
Mr. Faibille warned that his outfit will revoke the licenses of Petroleum companies who continuously violate the Law.
“We have communicated that to them that it will not be only fines but there are instances where we see a pattern of repetition because they have the money and they will pay. So if beyond the fines, we have to revoke permit, we will do so. We do so with a very human face but where the facts are so glaring or the breaches are so glaring we do not tolerate that at all,”Mr. Faibille expressed.
Per the Law, a company that has provided engineering services in the Oil sector within 10 years should have up to 80 percent of its workmanship being Ghanaians.
Also, other services such as fabrication and construction companies must be done by at least 50 percent of Ghanaians within 10 years of a company’s operation in the country.
But Industry watchers are so far not satisfied with the level of local participation in that sector.
They have over the years condemned successive governments for failing to ensure that the country’s stake in that sector has been harnessed for the development of the country, more than ten years after oil resource was discovered in the country.