LI On Petroleum Local Content And Local Participation Regulation Passed

Emmanuel-BuahParliament has passed the Petroleum Local Content and Local Participation Regulations, 2013(L.I.2204) to develop local capacities in the petroleum industry value chain for sustainable economic development in Ghana.

The L.I. provides for at least five per cent equity participation of an indigenous Ghanaian company other than the corporation to be qualified to enter into a petroleum agreement or a petroleum license.    

The Minister of Energy, Emmanuel Armah Kofi Buah, told Parliament that the passage of the L.I. was “good  for Ghana” explaining that Ghanaians were getting closer to taking their destiny into their own hands by assuming the front seat in the petroleum value chain.

The purpose of the regulation includes the promotion of the maximisation of value addition and job creation through the use of local expertise, goods and service.

It also meant to increase the capability and international competitiveness of domestic businesses and to create petroleum and related supportive industries to sustain Ghana’s economic development.

The L.I. also provides that entities in the petroleum industry must submit their local content plans for their compliance with local content standards regarding the provision of goods and service.

In addition, it also requires entities in the petroleum sector to transfer advanced technology and skills related to the petroleum activities and their recruitment and training programmes to the Ghana National Petroleum Corporation or the Petroleum Commission (PC).

The PC Act 2011(Act821) which came into force after the discovery of oil in commercial quantities in 2007 requires the commission to promote local content and local participation in petroleum activities.

By this regulation, the  commission is mandated to establish and constantly review the guidelines and procedures for effective implementation of the relevant laws in the petroleum sector to ensure that Ghana maximises the benefits of the petroleum sector.

Osei Bonsu Amoah (NPP-Akwapim South), chairman of the Parliamentary Subsidiary Legislation Committee, said the committee observed the crucial role of the PC in the effective and efficient implementation of the regulation and recommended to the government to invest in the training of technical and managerial personnel.

“The government should also provide incentive for research and development within Ghana while the local sector should be adequately resourced to enhance funding,” the committee said.

Mr Bonsu said Ghana Exploration and Petroleum Forum, a civil society organi-sation, had reservations about certain aspects and provisions of the regulation in spite of the fact that they appreciated the benefits of local content strategies to Ghana and International Oil Company.

According to the committee the Forum was particularly opposed to regulation 4(4) which gives excessive discretionary powers to the Minister of Energy and Petroleum and the PC to determine the persons qualified to enter into a petroleum agreement or a petroleum license. By Salifu Abdul-Rahaman 

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