Friday, 25 February 2011

Ghana prepares local content bill for oil and gas industry

A spokesman for Ghana's Ministry of Energy, Edward Bawa, said the ministry is in the process of completing a bill mandating local companies to provide as much as 90 per cent of the work in the country's fledgling oil industry within a decade of the project's initiation.

Bawa added that the draft legislation will also stipulate that Ghanaians should hold at least a 5 per cent equity stake in oil and gas service contractors. A committee working under the country's proposed oil industry regulator will be responsible for evaluating the projects to ensure they comply with regulation. Bawa added that the ministry will aim to have a plan for local content before the “inception of every project”.

The local content bill is one of three that the Ghanaian parliament will consider this year. The country's legislative body is at the end of completion of an oil revenue legislation that will create a sovereign wealth fund and allow Ghana to borrow against future government oil revenue. A third bill, establishing an industry regulator independent of the country's state-owned oil company, was submitted to parliament for consideration in December.

Sources: Bloomberg, PRLog, Reuters

For more news and expert analysis about Ghana, please see Ghana Politics & Security.

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