6 KEY FINDINGS: AG's Performance Report on implementation of local content in the Oil and Gas Sector

At the commencement of public business today, Hon. James Klutse Avedzi (MP, Ketu North; and Chairperson of the Public Accounts Committee) motioned for a debate on a 12-paged Auditor-General’s (AG) performance report on implementation of local content in the oil and gas sector, presented to the House on 15 March 2017.

According to Hon. Avedzi, three years after the enactment of the Petroleum Act, the AG deemed it necessary to undertake a performance audit on the implementation of local content in the oil and gas sector. The objective was to determine the extent to which the Petroleum Commission has implemented the Local Content and Local Participation Requirements in the upstream oil and gas sector, with focus on the legal framework in place for the development of local content, responsibilities of bodies charged with the implementation of the content, and monitoring and evaluation of the content. The audit covered the period of January 2013 to September 2014.

Below are six key observations from the performance report:

  • Over 75% of all positions in the upstream industry (of the oil and gas sector) is occupied by Ghanaians;

  • The Petroleum Commission has been successful in reserving the procurement of some goods and services to indigenous Ghanaian companies, through close partnership with National Security, Ghana Navy, Port Health, Ghana Maritime Authority, Registrar General’s Department and the Ghana Revenue Authority;

  • Many contracts which should have been given to local companies have been awarded to foreign companies due to low skill levels and capacity of local companies.

  • Most indigenous companies prefer to import items when contracts are awarded to them instead of establishing facilities to undertake production in-country;

  • The Petroleum Commission has introduced the Ghana Internship Upstream Programme to address the skills shortage in the oil and gas sector, following a human resource analysis conducted in 2014 which highlighted deficits in the practical experience of local graduate engineers and technicians in the sector;

  • The Petroleum Commission had no monitoring unit for local content and mentioned lack of logistics as a cause of its inability to undertake monitoring exercises.

Download full report here: http://bit.ly/2pcQGPl

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