5% equity in any petroleum agreement reserved for Ghanaians - Petroleum commission CEO

Egbert Faibille asserted that government and his outfit to be specific has put in very effective measures to ensure that local content is taken seriously in the sector.

The Petroleum Commission CEO admitted that because of the resources, expertise and capital and risks involved, not many local entities have built capacity and the muscles to compete in the exploration and drilling of oil, however, the situation is being managed to ensure skills transfer and capable local entities are nursed in the near future.

Responding to questions about the involvement of local content in the 6 new blocks that have just been opened up for tendering processes to begin, Egbert Faibille disclosed that current regulations provide that 5% equity in all agreements be made available to competent Ghanaian entities.

Egbert Faibille buttressed this with reference to the LI 2204 which he states contain regulations guiding local content involvement in the oil sector. This he believed will increase the percentage of local companies and ensure skills and technology transfer to Ghanaians.

Despite the local content provisions in the LI, however, Egbert Failbille stressed that "Ghanaians can also bid generally for these PAs, they can bid for the blocks. But in the event that a foreign entity also wins and positions itself in such a way by reason of its commercial, financial and technical competencies over a Ghanaian and that foreign entity gets to the point where it must execute a PA, it must then necessarily also look for an indigenous Ghanaian to partner it to the extent of 5% equity in the business."

Oil companies with 'fake' Ghanaian partners to be deregistered from January 2019

The CEO of Petroleum Commission also issued a strong statement of intent of his outfit to deregister all companies that were fronted for by 'non-existent' local entities.

He expressed worry that in the past some Ghanaian companies front for foreign entities in the guise of being partners but after the licenses are issued, they go behind to receive monthly compensations of $10, 000 with no involvement in the operations of the company.

The situation he said is being tackled and most of those companies have been fished out after a Monitoring and Evaluation exercise was carried out to audit the industry.

Egbert Faibille was disappointed that Ghanaian companies will go to that extent in supporting foreign entities instead of focusing on skills transfer and capacity building to help grow the economy.

"We have been to companies where this is a joint venture company but the indigenous Ghanaian company doesn't even have presence in the office, the JV doesn't work. They have come and we have told them that when it is time for the renewal of their JVs we will not renew it. So most JVs that are fronts are going to be deregistered on the books of the Petroleum Commission beginning January next year. Some of them have come to concede they go and take $10, 000 a month and instead of focusing on transfer issues and what have you to help Ghanaians and for that matter you go there and they hand you $10, 000 a month just for joining up with them to deceive the system" the CEO said passionately.

These remarks were made during a media briefing after the launch of the open tendering process in the oil sector which saw the gathering of stakeholders in the oil sector.