80 percent of registered indigenous petroleum companies not active

Despite the Petroleum Commission’s claim that local content participation in Ghana’s oil and gas sector is improving, it says more than 80 percent of indigenous companies registered with the Commission are currently not operational due to limited capacity.

Speaking to Citi Business News on the sidelines of the Local Content Conference in Takoradi, the Business Advisory and Enterprise Development Manager at the Petroleum Commission, Kwasi Senya, said out of the 771 registered companies with the Commission, 82 percent are indigenous, but majority are not operational. Correspondent Akwasi Agyei Annim has the details from Takoradi.

In 2018 alone, the Petroleum Commission approved 420 million Dollars’ worth of contracts, but only 77 million Dollars went to indigenous Ghanaian companies, which basically represents less than 30 percent of the total contract sum.

This is in spite of the fact that, through Ghana’s local content policy, many more Ghanaian companies are expected to provide majority of the services to the upstream oil and gas sector.

After a presentation on preparing Indigenous Ghanaian Companies to play active roles in the Upstream Oil and Gas industry at the Local Content and Exhibition conference in Takoradi, the Business Advisory and Enterprise Development Manager at the Petroleum Commission, Kwasi Senya, told Citi Business News that most of the Ghanaian registered companies with the Petroleum Commission are not active to benefit from such contracts due to limited capacity.

“Less than 20% are doing active activities. The rest are hoping for an opportunity to come in. The industry is not like buying and selling where you can go and buy from Okaishie and sell. There are standards and requirements. Often times where they are invited to tender, a lot of them do not follow the requirements in the invitation to tender. They think they have to come and they bring anything, but we are constantly providing that kind of advisory services to them.”

Also speaking on enhancing the benefits Ghanaians can get from Joint-Ventures, Manager at the Cost Audit of the Petroleum Commission, Frederick Owusu Mensah, said several Ghanaian partners in the Petroleum sector Joint-Ventures are not playing significant roles.

“The participation of Ghanaians is quite minimal. They seem to be confined in areas we call the low hanging fruits. They are in areas such as accommodation, logistics and catering. There are few Ghanaian companies that are doing the hardcore activities. If that continues, it is going to render the objectives for which the petroleum policies were formulated null and void.”

The Local Content and Participation regulation, LI 2204 of 2013, demands the establishment of a Local Content Fund to support the capacity of locals.