Only 18% of petroleum contracts awarded to Ghanaian companies

• Posted on December 12, 2019December 12, 2019
• by Nana Kwesi Coomson
• Comment

Even though government has put in measures to ensure increased participation of Ghanaians in the oil and gas industry, the participation of locals remains insignificant.

Figures from the Petroleum Commission reveal that Ghanaian owned businesses won only $77 million of the $ 420 million awarded in the petroleum industry.

Even though the figure excludes Joint Ventures with foreign entities, the figure remains unimpressive.

In November 2013, LI2204 was promulgated to promote maximization of value-addition and job creation through the use of local expertise, goods and services business, financing in the petroleum industry value chain and their retention in Ghana.

The Petroleum Commission is required to oversee the implementation of LI2204.

Kwadwo Asare Kyei, local content manager at the Petroleum Commission speaking at the drilling Down for Oil and Gas in West Africa Media Training says there are myriad of reasons accounting for low participation of Ghanaians in the oil and gas industry.

This, he said, include the fact that most of the indigenous companies operate in the downstream petroleum value chain due to the lack of financial capacity to execute high value contracts. Additionally, many of these local firms lack the expertise to participate in the upstream petroleum sector.

Reacting to the issue Dr. Steve Manteaw of the Public Interest and Accountability Committee added that Ghana would have to deal with the issue of standardization if it intends to make any headway on its local content agenda.

He explained that the industry requires workers and businesses to obtain certain international standard certifications before they are awarded contracts since the petroleum industry is a highly specialized field. However, most Ghanaians who have the requisite skills to get contracts but do not have the international certification which the International Oil Companies (OICs) require.

Dr. Manteaw therefore called for stakeholder engagements to develop a local certification mechanism for Ghanaians which is consistent with the international standards so more people can take advantage of the opportunities in the upstream petroleum industry.

He also urged government to align the one district one factory policy with the needs of these companies. According to him, there are some basic things used by the OICs which can be locally acquired however, currently, most of them are imported due to the lack of a deliberate policy to get these manufactured locally.

Corroborating the need for local increased local participation, an energy economist, DR. Ismael Ackah urged Ghanaians who have formed joint ventures with foreign firms to go beyond taking dividends but to actively participate in the management of these companies.

He called for stiffer punishment for persons who engage in fronting: the practice where local companies assume corporate images of foreign ones to enable them access some incentives for their operation.

Fronting has made it difficult for some local companies to access contracts and other opportunities in the petroleum sector.

By Rosina Foster