The Deputy Minister of Energy in charge of Petroleum, Dr. Mohammed Amin Adam has alerted that the days of local companies fronting for international oil and gas companies for corrupt gains are now over.
According to Dr. Adam, such an act is now criminal and punishable by law. In Cape Town, South Africa he submitted:
“I must say that local content will work in nations where mangers or the bigger stakeholders deliberately work to develop the capacity of its citizenry and indigenous firms in readiness for participation in the upstream sector and all associated values along the chain.”
He urged oil companies which think that local content provisions add to their operational cost to look at it as part of their strategic move to help add value to the host country’s skills and capacity development and not as an ordinary legal requirement.
In accordance with Regulation 4(6) of L.I. 2204, the minster explained that the law is clear that “A non-¬indigenous Ghanaian company which intends to provide goods and services to contractor, a subcontractor, licensee, the corporation or other allied entities within the country shall incorporate a joint venture company with an indigenous Ghanaian company and afford that indigenous Ghanaian company an equity participation of at least 10 per cent.”
He added: “We must move away from a mere local equity participation and prioritize local content that seeks to ensure value addition, therefore, the issues again go back to governments’ ability to put in place minimum infrastructure that would allow us to add value through local content. When you support in the development of these capacities and the Ghanaian companies or companies in any other country you operate begin to play lead role then you – the IOCs can say you have contributed to a meaningful local content of a country.”