Petroleum Commission announces new measures to enforce local content laws

Petroleum Commission announced new measures to address challenges hampering implementation of the Local Content Law

The Chief Executive of the Petroleum Commission, Egbert Faibille Jnr, has announced new measures to address challenges hampering implementation of the Local Content Law in the petroleum upstream sector.

Announcing measures taken by the Commission to address these challenges, Mr. Faibille stressed that transfer of technology is one of the significant issues in oil and gas contracts.

Hence, the Commission will set up a Technology Transfer Directorate to make sure international oil companies obey laws by transferring technical knowledge to indigenous companies in joint ventures.

He added that without mastery of oil technology, petroleum developing-countries cannot ensure, for instance, their exploration efforts are adequate and maintain production rates which are consistent with their national interest and oil requirements.

He added that technology transfer will enable local businesses to take advantage of prospective reserves which are not large enough to be economically attractive for the international oil companies to invest in, but may be large enough for domestic consumption.

Mr. Faibille stated that after a series of engagements with upstream petroleum companies, it came to light that there is a gap in terms of practicalising technology transfer requirements in the industry.

“The most notable among the issues identified is the fact that skills development is the dominant component of technology transfer in the industry, and for this we applaud the international oil companies which kept faith with us in transferring knowledge and skills to Ghanaians,” he said at the 7th edition of the Local Content Conference in Accra.

He emphasised that technology transfer will open a new frontier of prospects in areas which require specialised and high-level technology: such as Well Engineering Services, Seismic Data Acquisition, Processing and Interpretation Activities, FPSO Construction and Oil and Marketing Services, among others, for Ghanaians and Ghanaian businesses.

“Among the over 1,700 goods and services procured by exploration and production companies, a majority of them fall within the ambit of mid- to high-technical services – hence, organisers they have high commercial value,” he added.

Mr. Faibille urged indigenous Ghanaian companies to proactively build competence in the areas outlined, and not only concentrate on the ‘low-hanging fruit’.

The Local Content law requires that international oil companies operating in Ghana outsource areas of their operations which can be handled locally to Ghanaian companies, or enter into Joint Ventures with local companies.

Mr. Faiblle disclosed that an assessment carried out by the commission revealed that there are serious challenges hindering the advancement of technology transfer to indigenous Ghanaian companies in joint ventures.

“It was realised among others that many indigenous Ghanaian companies are not participating in the core technical areas with high prospect of technology acquisition, and there is low preparedness of Ghanaian companies to receive technology,” he said.

Describing the situation as disappointing, Mr. Faibille said Ghanaian companies in joint ventures with international oil companies operating in the engineering and fabrication businesses do not even have a yard or operational base of their own.

“Ghana cannot be taken off the energy menu because we are still an emerging economy with many developmental challenges; we must exploit and efficiently utilise these God-given resources to develop our economy,” he said.





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