Abstract

Local content and local participation policy and legislation have come to stay in Ghana's oil and gas industry. The policy and legislation have been described largely as adequate, promising, and necessary to promote local content and local participation in the oil and gas industry. Implementation of the policy and legislation has, however, produced mixed results, according to industry stakeholders and researchers. Evidence on the ground suggests some level of compliance by international oil companies to implement the policy and legislation on local content. Some Ghanaian companies have been awarded contracts to provide essential services and goods to these companies during exploration and production. Several factors, however, militate against effective implementation of the policy and legislation. Notable among these are the low capacity of local firms, discrimination against local firms by international oil companies through vertical integration, and the weak regulatory capacity of the Petroleum Commission to enforce local content implementation. Vigorous capacity building of local firms, affirmative actions for local firms and employees, and legislative reviews are recommended to enhance the implementation of local content and local participation in Ghana's oil and gas industry.

Highlights

  • Oil and gas were discovered in Ghana in 2007 and the country began to extract these resources in 2010

  • In the contract for site preparation for the Offshore Cape Three Points (OCTP) onshore gas receiving facility in Sanzule, all the 140 unskilled and semi-skilled workers were employed from the 18 project-affected communities; catering, driving, and hospitality services were all provided by companies from the communities; and Sri Emas was awarded a contract worth US$300,000 to construct a road bridge connecting the farming communities of Adubrim to the cocoa-growing areas of Ellembelle in the Western Region (Africa Centre for Energy Policy 2017)

  • Four years on from the passing of the Petroleum (Local Content and Local Participation in Petroleum Activities) Regulations (LI 2204), it can be said that the country has made limited progress in both the employment of Ghanaians and enabling local firms to enter the supply chain of the industry

Read more

Summary

Introduction

Oil and gas were discovered in Ghana in 2007 and the country began to extract these resources in 2010. While local content policies (LCPs) and legislation have the potential to stimulate broad-based economic development, which is necessary to alleviate poverty, achieve prosperity, and ensure sustainable economic and social outcomes in Ghana’s oil and gas sector, their use has often achieved mixed results in many extractive developing countries. It has been over four years since Ghana passed the LI 2204. Some former staff of the Enterprise Development Centre (EDC) and some international oil companies such as Tullow Ghana and Kosmos Energy were interviewed to obtain additional information

Contextualizing natural resource extraction and national development
Policy development process
Legislative development process
Institutional arrangements for local content implementation
Current level of goods and services supplied by Ghanaian companies
Foreign
Local business capacities in the oil and gas industry
Discrimination against indigenous companies
Regulatory institutional challenges
Findings
11 Conclusion and policy recommendations
Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call