GOGSPA Discusses Local Content Regulation Implementation

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In Ghana News Feed
Feb 21st, 2014
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PIC_0532The Ghana Oil and Gas Service Providers Association (GOGSPA), which welcomed the passage the Petroleum Local Content and Local Participation Regulations, 2013 (L.1.2204) discusses its effective implementation.

A  workshop was organized by GOGSPA to create opportunity for the Petroleum Commission to educate members on the LI 2204 which implementation takes effect on February 18th 2014, and also to explain some pertinent issues as regards what the LI contains and is in it for its the implementation.

According to GOGSPA Executive Director, Mr. Nuetey Adzeman, the coming into being of the Regulation was achieved in spite of much stiff opposition from foreign upstream oil and gas companies and their governments.

GOGSPA said it has been following closely the number of meetings held by the committee to consider the Legislative Instrument, including concerns raised by the Ghana Exploration and Production Forum, an association of private sector upstream oil and gas companies operating in Ghana, and that Fair representation of the local companies in the new oil and gas industry has always been the core focus of the Association.

However GOGSPA welcomed the passage by the House of Parliament which followed a report by the Parliamentary Committee on Subsidiary Legislation, which held that the concerns raised by upstream companies were untenable and that the regulations were not in contravention of the supreme law of Ghana’s 1992 Constitution.

The passage of the law, according to the president was timely and very important, and a great boost for the local service providers in the new oil and gas sector.

According members of the Association, the oil companies regard this provision as a unilateral amendment of existing petroleum agreements and a breach of the 1992 Constitution, which frowns on retroactive legislation.

The Association raised concerns with regulation 46 which provides for offences and penalties, saying that the proposed fines and sentences are a unilateral variation of the companies’ rights under existing petroleum agreements.

Meanwhile in her presentation, on the Local Content Regulation (LI 2204) an official from the Petroleum Commission, Dr. Juliet Tsumasi Anokye explained that with the passage of the regulation, local companies stand to benefit from learning from the foreign companies and that the double-sided provision seeks to facilitate a blessing to the local indigenes and the foreign investors alike.

She noted that Local Content has many benefits to both indigenous Ghanaian and foreign investors as it creates avenues for value addition to our resources, job creation, financing, human capital development and technology transfer among others.

But, according to her in spite of all the benefits that companies can derive from the Local Content legislation, there could be some challenges as regards certification, limited capacity of local companies to deliver services required.

Dr. Juliet Tsumasi Anokye also indicated that there is information irregularity on tendering processes, small or poorly structured indigenous companies competing against experienced IOCs and financing are some major challenges facing the sector.

In addressing the issue of procurement, she advised companies to organize procurement workshops that will help clear the mystery as they will have the opportunity have a one-on-one interaction with their partners to know what they really need.

On the way forward, Dr. Juliet Anokye said the Commission is in the process of establishing a Local Content Fund, which is waiting for Cabinet approval, and if this materializes, the issue of funding would be addressed.

She also mentioned that there is the need for training and the sensitization of IOCs to use Ghana and not to look elsewhere for their products.

This she averred will be achieved if the country with its indigenous companies positioning the country as a hub of oil and gas which can be readily available.

She asked locals to see themselves as being part of the entire oil and gas production cycle, because the power to partake has been given them and that such conflicts that unavoidably turn such natural resource blessings into curses will be avoided.

Below are pictures from the workshop

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