FPSOs Capacity Enhancing Ghana’s Local Content

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FPSO KN

Ghana has three Floating Production, Storage and Offloading (FPSO) vessels namely, FPSO Kwame Nkrumah, FPSO Atta Mills and FPSO John Kufuor. As part of the country’s local content law, the operators of these vessels have employed about 200 local workers. FPSO Kwame Nkrumah was estimated to provide about 7000 jobs, while FPSO John Evans Mills was to provide about 5000 jobs.

The Petroleum (Local Content & Local Participation) Regulations, 2013 (L.I. 2204) passed by the Ghanaian Parliament on November 20, 2013 was with the main objective to give Ghanaians an opportunity to be part of the country’s  natural resource activities and benefit from it thereby improving their standard of living.

Earlier, the Government commissioned the Enterprise Development Centre (EDC) in May 2013, a five-year Project jointly sponsored by the Jubilee Partners – Tullow Oil -Ghana, Kosmos Ghana, Anadarko, Petro SA and the GNPC, to provide support to Ghanaian small scale and medium enterprises (SMEs) as well as empower them to position themselves to take advantage of business opportunities in the oil and gas sector.

According to the Law, the Ghanaian government stipulates that Ghanaians should be prioritised in terms of employment in the petroleum industry, and should benefit from the country’s resources. Years ago, issues of lay off surfaced in the country’s oil and gas sector. Most of which was due to the poor operation of FPSO’s. Over the years, arguments have been on the abuse of local workers by some foreign companies and the poor practice of local content law in Ghana.  Earlier in 2014, some Ghanaian MODEC workers embarked on an industrial action to protest pay disparities, a situation local workers faced in the company.

In 2015, MODEC Ghana, operators of FPSO Kwame Nkrumah on the Jubilee oil field, issued a statement informing the general public of further redundancies. This followed the dismissal of 12 workers at the company’s catering department. This the company explained its intention of outsourcing the department’s role to a service provider.

Also in 2016, the General transport petroleum and chemical workers union disclosed a massive layoff of about three hundred Ghanaian workers in some oil and gas companies in the country.

In 2017, the General Secretary of the Industrial and Commercial Workers’ Union, Solomon Kotei announced the highest probability of sacking oil and gas workers due to the nation’s power instability.

Section 1(b) of the Labour Act law of Ghana, outlines the key purpose of developing local capacities in the petroleum industry value chain through education, skills transfer and expertise development, transfer of technology, knowhow and active research and development programmes.

Futhermore, section 2(1) of the law says the law is to promote the maximization of value addition and job creation through the use of local expertise, goods and services, businesses and financing in the petroleum industry value chain and their retention in the country has been abused in the current context of the country’s oil and gas sector.

Just a handful of companies are fully involved in the sector with the likes of Seaweld Engineering limited, Zeal Environmental Technologies Limited among a few others. This is a clear abuse of the LI 200 Section 4(1) which further states that ‘an indigenous Ghanaian company shall be given first preference in the grant of a petroleum agreement or a license with respect to petroleum activities subject to the fulfillment of the conditions specified in these Regulations.

Currently, Seaweld Engineering stands as the major assemblers and undertake repair works on the country’s FPSO’s. Zeal Environment is also responsible for taking care of wastes generated by the oil companies in the country as well as others abroad. It is solely owned by a Ghanaian and all the employees are Ghanaians.  However, we ask how many Ghanaian companies are doing well in the oil and gas sector, and how has their contracts contributed to reducing youth unemployment in Ghana?

www.reportingoilandgas- Jacqueline Pardikie Parditey

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