The upstream petroleum sector has witnessed remarkable achievements in local content, nine years after the passage of L. I. 2204 and its implementation.
In 2020, for instance, out of a total US$1.3billion of service contracts awarded, US$238million thereof in value terms went to Indigenous Ghanaian Companies (IGC) while US$1.1billion went to joint ventures which are also local companies.
Additionally, as at the end of 3rd Quarter 2021, IGCs and joint ventures benefitted from value of service contracts worth US$5.2million and US$45million respectively out of a total sum of US$54million. The Commission continues to develop relevant guidelines to deepen the implementation of L. I. 2204.
In spite of the successes, the upstream petroleum sector continues to face several challenges which, to a large extent, are stifling the growth and development of indigenous participation in the sector.
“It is therefore important that we strive to eliminate all barriers to local participation in our industry, and it is on this basis that the Petroleum Commission worked with the Ministry of Energy to obtain parliamentary approval for amendments to L.I. 2204 to further deepen local content in Ghana’s upstream oil and gas industry,” said Mr. Egbert Faibille, Chief Executive Officer-Petroleum Commission.
He was speaking at the 2022 Local Contents Conference and Exhibition in Takoradi. The three-day conference had the theme Sustaining Local Content Development through Enhanced Exploration and Production Activities in the Era of Energy Transition.
He explained that amendments have introduced channel partnerships and strategic alliance arrangements between non-indigenous Ghanaian companies and indigenous ones, as an additional avenue for foreign participation in our industry.
Also, he said the amendments will enhance the scope for supply of goods and services reserved for indigenous Ghanaian companies.
“The Commission recently held a stakeholders’ forum in which all concerned were taken through the amendments. We have also given out standard agreements to be used for channel partnerships and strategic alliances to stakeholders for their study and feedback. We aim to formally commence approvals for channel partnerships and strategic alliances from the end of quarter one 2023,” he noted.
Mr. Faibille added that the permitting regimes for channel partnerships and strategic alliances are ready and in place.
He emphasised that channel partnerships and strategic alliances have not come to replace joint ventures, but to complement and vary the modes of contracting in the industry.
According to him, local content development has its inherent challenges – while the issue of energy transition presents another layer of challenge.
“The opportunity we have is to deliberate and proffer solutions to these twin challenges over the next couple of days, as to how to navigate the headwinds of energy transition to enhance exploration and production (E&P) activities in Ghana’s oil and gas industry,” he said.