Petroleum Commission demands transparent contracts

The Petroleum Commission has warned that it will not overlook any clandestine award of contracts by players in the country’s upstream sector to disadvantage any indigenous companies operating within the space.

Addressing participants during a networking session at the Ghana Stand at the ongoing ONS-2018 conference in Stavanger, Norway, the Chief Executive Officer Mr. Egbert Faibille Jnr. said the Petroleum Commission would not accept the situation of companies devolving into three or more companies to outwit the system and award contracts to itself.

Transparency and level playing field

“What we want is contract transparency which is an essential precondition to ensuring that all parties benefit from the industry. Therefore a failure to ensure transparency (means) we will immediately unbundle such a contract when discovered”, he said.

He said on the back of the ONS conference that it was important for Norwegian firms such as Aker Energy which are about to begin operations in Ghana to ensure best practices as well as work with locals.

“We at the Commission are not happy that when it comes to contracts, our desks are inundated with complaints that the Ghanaian entity is not qualified,” he said.

He said with Ghana following the good examples of Norway and his interactions with Aker Energy, it is the expectation of the Commission that Aker would take the issues of local content to another level and “We at the Commission would hold them to that.”

“Aker Energy expressed commitment to give true meaning to local content, and if that commitment would work, there is the need for the formation of healthy joint ventures starting from here at the 2018-ONS Ghana Stand in Stavanger. We will ensure that transparency in contracts are followed and carried through,” he said.

The CEO assured hundreds of prospective upstream investors who thronged the Ghana Stand that the Petroleum Commission is committed to ensuring that right partnerships are formed.

Cannibalization of contracts

“We do not want to see situations where indigenous companies or joint ventures cannibalize all contracts or have unhealthy relationships – we seek among others, work with companies that have the needed competency to be able to bid for and win,” he said.

The Commission’s doors, he said, are opened and ready to serve every company according to the set rules that govern the industry, to arrive at a common goal of a win-win situation for Ghanaian and foreign companies doing business in the country.

For his part, the Country Manager of Aker Energy, Mr. Jan Helge Skoken said it was gratifying to note that Ghana has special Norwegian businesses after its first business visit to Ghana in March this year with 28 companies.

He assured of closer collaboration to ensure benefits for all and that it was more encouraging that Ghana Day has been fully subscribed to.

Ghana Day

The participants later went into a networking session in readiness for Ghana Day where more companies would hold more discussions with the Ghanaian delegation and exhibitors.

Prior to the trade mission, the regulator had constantly moved to ensure the development of a local supply chain, which has become imperative to the success of any local content programme.

With the entry of Aker Energy from a country Ghana is benchmarking as best practitioner, together with other international oil companies it would be encouraged to institute business incubation programmes and other support programmes aimed at strengthening the local enterprises to become competitive.

The Commission believes that that could be achieved when stakeholders develop a “Do it in-country” and “doing it with locals” mindset to invariably reduce project costs and ensure market reliability.

Local content

The Commission at its last annual local content seminar in Takoradi indicated that the upstream petroleum industry is noted for big contracts, however there is also the lure of modern approaches in supply chain management suggesting that efficiency and value are created when companies utilize the services of small firms which have low overhead costs and are able to quickly respond to the needs of their clients.