Government must have the courage to introduce a policy that will compel oil and gas companies to retain a portion of their profits in the country for effective implementation of the proposed national Local Content Policy, currently before Parliament, according to Joseph Owusu, Chief Executive Officer (CEO) of the EO Group, a principal actor in Ghana’s oil discovery.
He said Local Content Policy for oil and gas, without the needed capital for businesses and companies, would not realize its desired objectives.
He explained that when such funds are retained in local banks it would place them in the position to make funds available to the private sector, especially to Ghanaian companies that the Local Content Policy was supposed to protect.
Speaking at a day’s dialogue to commemorate the first anniversary of Ghana’s off-shore oil production from the Jubilee Oilfields, Mr. Owusu said Indonesia considered such a policy and though it initially had some challenges, today the country was reaping from its benefits.
He said the operators might not be happy with such a policy but indicated that some common ground could be achieved with them so that they do not repatriate all their profits.
The Ghana Journalists Association and the Ghana Independent Broadcasters Association organised the dialogue in Accra on Thursday under the theme: “Ghana’s Jubilee Oil – One Year On – Lessons Learnt”.
Making further suggestions for the way forward for Ghana’s oil and gas sector, Mr. Owusu said the current 80,000 barrels of oil production per day from the Jubilee Oilfield was insignificant to the world production and advised that more capital injection ought to be made in the sector by investors.
Ghana’s production represents about 0.1 percent world market share.
Mr. Owusu said oil and gas was going to play major role in the global economic growth – experts had projected that in the short term to medium term the demand for oil will grow by 93 million barrels by 2015.
In the long term, he said, an additional 110 million barrels of oil per day would be demanded to power the global economy.
Mr. Owusu indicated that whilst Ghana focused on building capacity in skill acquisition for the sector, it was also equally important that efforts were made to look at the possibility of an on-shore oil production.
This, he said, was mainly because off-shore oil exploration and production was expensive compared to on-shore – It costs 60 to 100 million US dollars to drill a single well off-shore where as it costs just about five million dollars on on-shore.
Reacting to why the country’s oil production targets could not be met as well as the expected proceeds, Mr. Owusu said perhaps the operators did not do well in setting the expectations for Ghanaians.
“We need to tell Ghanaians that it is not easy in removing oil from the ground. Until you actually begin production of oil you will not know exactly the true picture. It is not easy to bring oil back from the field as we thought or made Ghanaians to believe. It’s a very complicated reservoir.”
Six months after production, it was projected that oil production will jump to about 120,000 barrels a day.
The Ghana Journalists Association President, Ransford Tetteh stressed the need for media practitioners to show interest in build their capacity in the oil and gas sector so as to be able to adequately inform society about developments.
He said the role of journalists in developing a transparent and an efficient oil and gas sector could not be underestimated and urged stakeholders, especially operators and government, to always consider the media as a crucial partner.
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