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How indigenous Ghanaian companies are benefiting from service contracts in upstream petroleum sector

BY: Dotsey Koblah Aklorbortu
How indigenous Ghanaian companies are benefiting from service contracts in upstream petroleum sector
How indigenous Ghanaian companies are benefiting from service contracts in upstream petroleum sector

Nine years after the passage of L. I. 2204 and its implementation, the upstream petroleum sector has witnessed remarkable achievements as indigenous Ghanaian companies have dominated contracts issued by international oil and gas companies operating in the country.

According to the Petroleum Commission, in 2020 for instance, out of a total of US$1.3billion of service contracts awarded, $238million in value terms went to indigenous Ghanaian companies while US$1.1 billion went to joint ventures.

At the end of the third quarter of 2021 Ghanaians companies and the joint ventures benefitted from value of service contracts worth $5.2million and $45million respectively out of a total sum of $54million.

Speaking at the ongoing Local Content Conference and Exhibition in Sekondi/Takoradi on Tuesday, the Chief Executive of the Petroleum Commission, Mr Egbert Faibille Jnr., said the commission continues to develop relevant guidelines to deepen the implementation of L. I. 2204 for the interest of the country and industry.

“In spite of the successes, the upstream petroleum sector continues to face several challenges which to a large extent is stifling the growth and development of indigenous participation in the sector,” he said.


Mr Faibille said these challenges, though surmountable, are limiting the success of the country’s local content agenda, “It is therefore important that we strive to eliminate all barriers of local participation in our industry.”

“It is on this basis that the Petroleum Commission as an industry regulator 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,” he said.

The amendments he said have introduced channel partnerships and strategic alliance arrangements between non-indigenous Ghanaian companies and indigenous Ghanaian companies, as additional avenues of foreign participation in the industry.

“The amendments will also enhance the scopes for the supply of goods and services reserved for indigenous Ghanaian companies,” saying, the commission recently held a stakeholders’ forum at which all concerns were taken through the amendments.

The commission he said has 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 first quarter of 2023,” and that permitting regimes for channel partnerships and strategic alliances are ready and in place.

He emphasises that channel partnerships and strategic alliances would not to replace joint ventures but to complement joint ventures and vary the modes of contracting in our industry.