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Halt invasion of foreign service providers: Group

A global management and technology consulting firm, Accenture, has advised Ghanaian oil and gas authorities to make quick and deliberate interventions to ensure that indigenous companies and people obtain oil and gas contracts.

The company said the days when the discovery of oil was deemed a sure conduit to prosperity were over, unless the nationals of the resource participated fully to retain a significant portion of investments in the industry.

“The golden era of easy oil is over, therefore, any investor in oil in any country must ensure that the locals are not left out of the money the foreigners bring to invest,” Accenture, also a technology out-sourcing company, said in a report: “The Golden Era of Easy Oil is over”, it stressed.

It further stated that the rules of the game had changed with much emphasis now on local content in which developing economies use the resource find to stimulate industrial development by building local capacity, a skilled workforce and creating a competitive local supplier base.

“Local contents are minimum requirements for doing business with host countries and national oil companies,” Accenture said in the report.

But the story in Ghana is different. Although the government has developed a local content policy, it has not yet received Parliamentary approval and the expertise of local suppliers and workers in oil and gas has not seen any serious push, analysts claim.

There is already huge dominance of foreign service providers since the country announced the commercial discovery of oil in 2007 and there is no attempt to retain part of the huge resources they inject into the local economy.

Currently, the foreign service companies have taken over the supply chain, including catering services, the supply of crew and medical examinations just to mention a few.

The Ghana Oil and Gas Service Providers Association (GOGSPA), an association formed out of the disappointments and the failure of authorities to develop local capacity, has associated itself with the Accenture Report, saying there were a lot of issues in the industry that needed urgent attention.

The Executive Director of GOGSPA, Mr. Nuertey Adziman, deplored the practice where oil contracts to be performed in Ghana were advertised in the foreign media, when all attempts to have them use the association’s communication platform to the benefit of Ghanaian suppliers had proven futile.

As if that was not enough, Mr. Adziman said in offshore contracts, local companies were classified as inexperienced and that the manpower of the country lacked the requisite skills to undertake such works.

The GOGSPA executive director suggested that Ghana should learn lessons from Norway, where the government awarded contracts to Norwegian bidders, when they proved to be competitive in terms of price, quality, delivery time and service.

“The rationale behind this is to promote the establishment of the local industry which would in turn create jobs for the local people and grow the economy in addition,” Mr. Adziman stated.

Recently, the business magnate and Chief Executive Officer of Antrak Air also complained about the inability of the domestic airline to get oil and gas contracts because they were out-competed by foreign firms.

According to GOGSPA members, much of the over $3.5 billion used to develop the Jubilee Field could have been trapped to trickle down into the local economy if the right local content policy had been in place.

However, the lead operator of the Jubilee Field, Tullow Oil Plc, told the Daily Graphic that in the last 20 months, it had awarded contracts to about 1,200 local service providers, worth over $154.7 million.

The Public Affairs Manager of Tullow Oil Ghana, Mr. Gayheart Edem Mensah, said in absolute terms, out of a total of 1,591 contracts the company awarded during the period leading to the first production, 1,282 went to local contractors and 309 to foreign contractors.

Source: Daily Graphic/Ghana

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