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PARTICIPATION IN LOCAL CONTENT IN THE OIL AND GAS INDUSTRY; OPPORTUNITIES FOR THE NORTH

PARTICIPATION IN LOCAL CONTENT IN THE OIL AND GAS INDUSTRY; OPPORTUNITIES FOR THE NORTH. By Samuel Zan Akologo Country Director – SEND – Ghana Denmark Seminar by GDCA 31 st October, 2010. Introductory Comments.

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PARTICIPATION IN LOCAL CONTENT IN THE OIL AND GAS INDUSTRY; OPPORTUNITIES FOR THE NORTH

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  1. PARTICIPATION IN LOCAL CONTENT IN THE OIL AND GAS INDUSTRY; OPPORTUNITIES FOR THE NORTH By Samuel Zan Akologo Country Director – SEND – Ghana Denmark Seminar by GDCA 31st October, 2010.

  2. Introductory Comments • Discovery of oil and gas in Ghana is a double-edged sword – Needs careful handling. • It can be a curse or a blessing – we need to proactively seek the blessing and reject the potential curse!

  3. Why should we be worried? • Existing laws and policies in the extractive industry did not anticipate oil and gas hence inadequate. • Oil and gas management require ‘joined-up’ planning and inter-ministerial coordination; e.g. Interior, Finance, Trade, Industry etc. Too many grey areas. • High potential for tax evasion

  4. Contd. • Africa has no single good example to learn from in oil and gas management. • Weak technical know-how in the sector • Other extractives like gold mining failed us • North did not benefit from earlier national wealth – cocoa, minerals, timber etc • Fledgling and weak governance

  5. What is Local Content? • General objectives of Local Content • Ghana’s Goal for Local Content • Policy Objectives

  6. General Objectives of Local Content • Accelerate growth of indigenous involvement in the petroleum sector • Create opportunities for individual citizens to invest in upstream, midstream and downstream oil and gas development • Enhance the development of national technical and commercial oil and gas skills

  7. Contd. • Facilitate increased use of competitive national goods and services • Expand the commercial co-operation between national and foreign companies • Strengthen the national financial markets by floating shares in upstream and midstream companies

  8. Ghana’s goal for Local Content • To define actions that will ensure that the constraints and challenges are resolved to enable Ghanaians take control and thus maximise the benefits to them and by the Ghanaian state.

  9. Policy Objectives on Local Content • Sustainable exploitation of the country’s oil and gas endowment • Judicious management of the oil and gas revenue for the overall benefit and welfare of all Ghanaians, including future generations • Attraction of increased local value-added investments in the oil and gas sector • Creation of job opportunities; and • Indigenization of knowledge, expertise and technology, thus creating a self sustaining and buoyant economy.

  10. General Areas of participation in Local Content • Supplies/Procurement (Use of local contractors – regional suppliers) • Labour – both skilled and unskilled • Taxation and Royalty policies • Government expenditure (investment, services or luxury) • Transfer of technology

  11. Navigating the Terraina). Things to Avoid • Corruption • Hidden Agendas • Promoters – Oil Mafias • Political Pressure – let managers and technical people work

  12. Contd.b). What to look for • Transparency – access to information, full disclosure etc • Open contracting • CSO, media and legislature oversight • Revenue management and spending (fiduciary responsibility) • Integration in national development plans and budget (aggressive, widespread and sustainable development in the short term, SADA) • Health, Safety and Environment

  13. How can we maximise opportunities? • First for Ghana, our beloved country and especially deprived areas, including Northern Ghana • Some action points could include the following:

  14. Contd. • Independent regulation and oversight • Public education • Building capacity of legislature • Support, including training, for key institutions – Ministries: Environment, Finance, Economic planning, GNPC, Ghana Revenue Authority, EPA, Universities for new curriculum development.

  15. Contd • Resolving ownership issue – Western Region? Nzemas? NDC Gov’t? Politicians? Or State? • Ensuring national budget reflect national development priorities

  16. Conclusion: The Seneca Oil Poem • The Healthful balm, from Nature’s secrete spring, The bloom of health, and life, to man will bring; As from her depths the magic liquids flows, To calm our sufferings, and assuage our woes.

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