…energy minister tells existing downstream petroleum operators.
Existing operators in the downstream petroleum industry, particularly oil marketing companies, with majority foreign participation have up to 10 years to meet the local content and Ghanaian participation policy requirements, Energy Minister, Boakye Agyarko has said..
A Ghanaian company, in this sense, is one with a minimum equity of 51 percent held by Ghanaians.
Speaking at the second edition of the Ghana International Petroleum Conference in Accra on Thursday, dubbed; “Realizing the vision of a Petroleum Hub”, Agyarko said, government is developing a legislative instrument to give legal backing to this policy.
He revealed that Cabinet recently approved the Ghanaian Local Content and Ghanaian Participation Policy for the petroleum downstream, the equivalent of the Local Content Policy for the petroleum upstream.
The new policy is to ensure that Ghanaian participation is consolidated without compromising the desire to attract foreign direct investment.
“Henceforth, new entrants into the downstream petroleum industry particularly, Oil Marketing Companies that supply petroleum products to the market and to other industries including the mining, construction and aviation industries, are required to be Ghanaian companies,” Agyarko emphasized.
He stressed on the urgency on improving the quality of petroleum products, as some European Countries have recently banned the use of diesel.
In West Africa, countries are still struggling to meet even the most modest levels of quality.
The recent amendment to the International Convention for the Prevention of Pollution from Ships (MARPOL 5) is expected to have a major impact on all of the activities in industry.
The International Maritime Organization (IMO) has thus lowered the bunker fuel sulphur cap from 3.5 percent to 0.1 percent. This means that, the existing infrastructure in the sub region need to be upgraded to achieve the new specification and make the product saleable.
The regulation would have an immense impact on our refineries without sulphur reduction capabilities.
Agyarko said the coming into force of this policy may cause an increase in prices of distillate products, which may affect the value of fuel oils negatively, and consequently the operations of nearly all refineries without hydro desulfurization (HDS) units.
For this reason, the ministry has initiated steps to prepare a draft Fuel Quality Policy, which provides direction on how to address issues.
The draft policy will go through stakeholder consultations for their input before it is sent to Cabinet for approval.
In the meantime, the National Petroleum Authority has implemented guidelines on fuel quality specification, which put the sulphur level at 50ppm.
By Joshua W. Amlanu