Oil companies committed to local content law
Representatives of international oil companies working in the local oil sector have pledged to cooperate with the state in the implementation of the Petroleum Local Content and Local Participation Regulations Law passed by Parliament last Tuesday.
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At a meeting between officials of the Ministry of Energy and Petroleum (MOEP) and the representatives of the oil companies in Accra yesterday, the oil companies said they would be committed to the provisions of the new legislative instrument (Petroleum Local Content and Local Participation Regulations, 2013 (L.1.2204).
They, however, expressed the hope that their concerns would be considered within the 90-day transitional period and amendments made accordingly to the LI.
Commitment
Speaking on behalf of the Ghana Exploration and Production Forum (GEPF), Mr Paul Hinsworth, Country Director, Vitol Upstream Ghana Ltd (VUGL), said “As foreign investors in Ghana, we would like to reiterate that we believe in and support local content as the best way to create a sustainable long-term business in Ghana.”
He nonetheless indicated that there were a few issues that needed clarification with regard to the implementation of the law.
Responding to that concern, Mrs Vivienne Gadzekpo, Director Legal, MOEP, said the Petroleum Commission would be responsible for working out the roadmap for the implementation of the LI in the next three months.
The acting Chief Executive of the Petroleum Commission, Nii Adzei-Akpor, also said that a committee had been formed as instructed by the LI, which would have its first engagement with the oil companies on local content on December 5, 2013.
Misgivings
However, when asked by the Daily Graphic how the companies felt about the LI and whether it met their expectations, Mr Philip Liverpool, Director, Commercial, Kosmos Energy and member of the GEPF, expressed misgivings about the LI.
He said recommendations made by some of the investors were not included in the bill before it was passed.
“In very simple terms, we put forward our comments but they have not been factored in because they are not in the legislation. We are very encouraged about the fact that in the coming three-month period we would have another opportunity to discuss one item in particular around transitional arrangements, and that is how to harmonise the LI with our existing petroleum agreements because we signed ahead of the LI.”
Mr Liverpool said they looked forward to working with the Petroleum Commission and the ministry to get something that was practical and enforceable.
In response to his statement, Mrs Vivienne Gadzekpo said it was unfair for them to say that their comments were not considered and asked the companies not to expect that anything they wanted would be taken on board.
That, she said, was “because as a country, there are certain things that we also feel strongly about so we took on board some of them – some of them we didn’t think they were acceptable.”
Succession Plan
Responding to another question from the Daily Graphic on whether Ghana had the requisite manpower to occupy senior level positions in the nascent oil industry, she explained that schedules in the LI categorised various positions and when they should be attained, which range from five years upwards.
The Minister of Energy and Petroleum said the meeting was called to chart the way forward in the implementation of the LI and commended the oil companies and the Petroleum Commission for the part they played in the passage of the Petroleum Local Content Law.
“Government and Industry are going to work together and win together,” he said.
Touching on the issue of the minister’s discretional authority as spelt out in the LI, which the oil companies were not comfortable with, Mr Kofi Buah made reference to PNDC Law 84 and the 1992 Constitution of Ghana (Article 296) and stated: “I want to emphasise that the ministry’s discretional authority has always been there”.
Nevertheless, he assured the oil companies he was not going to exercise those powers without consultation with the Petroleum Commission and the partners in the industry but would employ a lot of flexibility, especially, during the transitional period.
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