FEATURED: The Bushy Roads In The City Of Accra: Who Is Sleeping On The Job?...

21.11.2019 Business & Finance

Government Moves To Review Oil & Gas Local Content Laws

By Morris Ogbetey || GBC Business
Government Moves To Review Oil & Gas Local Content Laws

Government is to present proposed amendments of the country's Oil and Gas Local Content laws to parliament next year. The changes seek to make it easier for International Oil Companies to enter Joint Ventureships with local indigenous companies hustle - free.

Local content regulations LI 2204 stipulates than a foreign oil company offers 10 percent of its business to a local company before commencement of operations. Due to lack of financial and technical capacity of local firms, this process has been challenging.

Ghana's local content laws, promulgated six years ago seek to offer Ghanaians the opportunity to have a bite of the oil and gas cake. Among other directives, international oil companies seeking to do business in Ghana must enter a joint ventureship with a local firm offering at least 5 percent stakes.

Although the foreign oil companies are ready in this regard, it has become difficult for local firms to take advantage of this golden opportunity.

Speaking at this year's local content conference at Takorad in in the Western Region, A deputy minister of Energy in charge of petroleum Amin Adams revealed that there are proposed amendments to the regulations, to make it much easier for joint Ventureships.

“Government is finalizing proposals for amendments to the local content and local participation regulations LI 2204 to include what we call the Warehousing Policy as additional means of meeting local content requirements. ”Chief Executive of the Petroleum Commission Egbert Faible warned, the commission will revoke the license of Ghanaian companies who enter into joint Ventureships without the necessary capacity to participate actively in the business.

“The era of fronting is about to end. Beginning next year, the Commission, working with other state actors including the Registrar General's Department and the Ghana Revenue Authority will begin enforcement of the relevant laws, including tax assessments on the basis of ones equity participation and hence profit sharing, revocation of operating permits and non-issuance of permits to IGCs and their partners proven after thorough investigations to have been engaged in fronting.”

The Local Content Conference, a gathering of oil and gas industry players, policy makers and regulators has become the biggest platform for a discourse on the future of Ghana's oil and gas.