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Ghana Prepares Bill on Local Content in Oil and Gas Industry

Feb. 25 (Bloomberg) -- Ghana’s Ministry of Energy will complete a bill this year mandating that local companies provide as much as 90 percent of the work in some areas of petroleum services within a decade of a project’s initiation, spokesman Edward Bawa said.

The draft legislation will also require that Ghanaians hold at least a 5 percent equity stake in oil and gas service contractors, Bawa said in a phone interview from the capital, Accra, today. An advisory committee working under the country’s proposed oil industry regulator will be charged with evaluating projects to ensure they comply with the regulations, he said.

“For the inception of every project we should have a plan for local content,” Bawa said.

Production began at Ghana’s offshore Jubilee field on Dec. 15. Output is expected to rise to 120,000 barrels a day later this year from about 50,000 barrels at the moment, according to Tullow Oil Plc, the field’s operator.

The so-called ‘local content’ bill is one of three major pieces of oil legislation the West African nation’s parliament will consider this year.

The legislative body is nearing completion of an oil revenue law that would 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.

To contact the reporter on this story: Jason McLure in Accra on jmclure@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.

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