As Ghana’s emergent upstream oil sector records massive participation and investment by international oil and gas companies, the solely Ghanaian owned public listed oil company, Ghana Oil Limited (GOIL), has declared its readiness to venture into the exploration and production upstream activities.
GOIL’s Board Chairman, Kwamina Bartels at the 49th AGM of the oil company in Accra gave the strongest indication to be a player in the upstream oil industry.
This development will give more meaning to the Local Content Law and local content participation efforts in the upstream segment of the industry. Despite, the local content law in place to ensure Ghanaian participation in the oil and gas industry, Ghanaian oil companies operations remain mostly in the downstream sector.
Mr. Bartels announced that, currently, GOIL is supporting and rendering services to upstream companies, and that in the near-future GOIL will be a major player in the upstream segment since its future is bright.
To this end, GOIL is to soon incorporate a company that will be responsible under the Group for handling GOIL’s activities upstream.
Even with the commercial discovery of oil in the Jubilee Field in 2007, and other discoveries subsequently, Ghanaian companies have still had to be content with operating in the downstream sector since most indigenous companies do not possess the financial muscle and expertise to take up major contracts upstream.
This development is indeed welcome news, because it means Ghanaians are gradually going to benefit far more than they are currently doing from their oil resource .
Industry analysts and commentators believe the move is in the right direction, since GOIL, as a partly state-owned company, is in a strong position to partner any of the world’s major exploration and producing companies.
A pragmatic step taken to break the resource curse is enactment of Petroleum (Local Content and Local Participation) Regulations, 2013 (L.I. 2204). The objective of the legislation is to, among others, promote job creation through the use of local expertise, and to develop local capacities in the petroleum industry. Ghana must strive for its full application to ensure Ghanaians benefit from the oil resource.
It is believed the GNPC also can be positioned to play a major role in exploration as well as production, and it is incumbent on government to ensure the right capacities are built to realise this objective which will benefit the state more.