Chief Executive Officer (CEO) of the African Energy Consortium Ltd., and Senior Vice-President of the Freddie Jordan Oil Company Ltd., Kwame Jantuah thinks that a clear definition of what is local content can help to prevent foreign oil companies from finding creative ways to take the pie from locals.
During his presentation at the recently concluded Guyana International Petroleum Business Summit and Exhibition (GIPEX), Jantuah said that one of the major difficulties in crafting Ghana’s LCP was the definition of local content.
He said that by having “local companies” in the LCP, foreign companies simply began registering locally. To make matters worse, the official noted that a lot of fronting was taking place with these companies.
“We, as a committee, had a tough time with the IOC (International Oil Company’s) and services companies because they weren’t prepared to train Ghanaians and brought their own people in from abroad to do the jobs, [that] Ghanaians could equally do – and were qualified and had the capacity to do. In discussing this they brought professional negotiators to discuss the local content definition as they felt once they had registered, they were entitled to be called local companies,” Jantuah explained.
He noted that subsequent to that, different expressions popped up to show the differentiation which included such definitions as: “local companies”, “local, local companies” and “local, local, local companies”.
“This was a dilemma for us at the time, then some of us put on our legal hat and started researching and then came up with the word ‘indigenous’, which we now inserted into the local content definition, one had to be an indigenous Ghanaian to be called a local content company and the conditions are spelt out in the petroleum local content law,” the Ghanian said.
Guyana’s LCP is still in its draft stage. Consultations have been done, with several factions of society proffering their suggestions. The Department of Energy has, however, been subjected to pressure from the local private sector, to have the policy implemented before first oil – which is expected “in weeks”.