All articles in the Local Content Section:

Ghana’s Local Content Fund Rakes Close to $5Million

In 10 years of commercial scale crude oil production, Ghana has raked up $4.5Million as proceeds from oil companies into the local content fund.

The amount is indicated in the latest report of the Public Interest and Accountability Committee (PIAC), an independent statutory body mandated to promote transparency and accountability in the management of petroleum revenues in Ghana.

Receipts into the fund are superintended by the Petroleum Commission, the country’s upstream regulatory agency, which is empowered to implement the deduction of 1% of the sum of any upstream contract.

Ghana’s local content and local participation regulations (L.I 2204) were promulgated in November 2013, “to inter alia promote maximisation of value-addition and job creation through the use of local expertise, goods and services business, financing in the petroleum industry value chain and their retention in Ghana”.

The Local Content Committee established by the Board of the Petroleum Commission is required to oversee the implementation of LI2204.

The Petroleum Commission, in the last one year (January to December 2020), established and resourced a Local Content Fund Secretariat at its headquarters in Accra. It appointed an Interim Coordinator of the Fund, who was endorsed by the Minister of Energy. It also developed a draft Local Content Fund Operational Guidelines.

This story had earlier been published in the January 2021 edition of the Africa Oil+Gas Report.


Fortress-Sellyfak Muscles into Ghana’s Oil Patch

Fortress Sellyfak has joined the list of local engineering service companies, poised to take advantage of the growing upstream hydrocarbon industry in Ghana.

The country is on course of producing in excess of 200,000Barrels of Oil Per day in 2019, with close to 200Million standard cubic feet of gas per day, three times the import of gas from Nigeria.

These fluids are produced from Tullow Oil operated Jubilee field, Greater Jubilee and TEN cluster of fields as well as the ENI operated Sankofa-GyeNyamme fields,

“Fortress-Sellyfak is a joint venture company specialized in Asset Integrity Maintenance,  Fabrication & Manufacturing and Equipment Rental in the Ghana Oil & Gas market”, the company says on its website. “Our cutting-edge technologies, inspiring workplace and ‘’can do’’ attitude endear our clients and attract the industry’s leading innovators”, it adds.

Ghana has witnessed three FPSOs commissioned on the three producing properties the 11 years since the first major oil discovery was made. A fourth FPSO is expected to be installed between 2022 and 2023 when Aker Energy commissions the Pecan Field.

Field optimisation, asset maintenance and field development opportunities make Ghana a very attractive place for this new company.

Equatorial Guinea orders cancellation of all contracts with CHC Helicopters

Calls on Oil companies to comply with local content regulations

The Ministry of Mines and Hydrocarbons of Equatorial Guinea has mandated all petroleum operators including but not limited to Noble Energy, Exxon Mobil, Kosmos Energy, Trident, Marathon Oil Corporation and other operators to cancel all contracts with Canadian-based CHC Helicopters, due to noncompliance of Equatorial Guinea’s national content regulations.

“It is the responsibility of the Ministry of Mines and Hydrocarbons to ensure strict compliance to our country’s National Content Regulation of the Hydrocarbons Law,” said H.E. Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons. “These laws are in place to protect and promote local industry, create jobs for citizens, promote the sustainable development of our country, and we are aggressively monitoring and enforcing the compliance of these requirements.”

Oil companies operating in Equatorial Guinea have been given 60 days to unwind contracts and find new suppliers, with only those companies in compliance with the local content provisions established in 2014 allowed to bid for contracts.

A compliance review of the entire sector is ongoing led by the Director of National Content and outside legal advisors of the Ministry.  The notice will be expanded to all service companies who are non-compliant as the review continues. Similar measures will be taken. 

Under the National Content Regulation of 2014, all agreements must have local content clauses and provisions for capacity building, with preference given to local companies in the award of service contracts. Local shareholders must be part of every contract as prescribed by law. The operators have an obligation to ensure compliance of their subcontractors. 

“We are eager to work with international companies who partner with Equatorial Guinea in the development of our industry,” said the Minister. “But we expect all companies operating in Equatorial Guinea to follow the laws of the Republic of Equatorial Guinea. As Minister, I will not hesitate to enforce the law to ensure compliance”.

“We Will Send the EFCC After You”, Wabote Warns

By Sully Manope

Simbi Wabote, the former Shell Nigeria Director who is now Executive Secretary of the Nigerian Content Development Monitoring Board (NCDMB), has announced the takeoff of a forensic audit of remittances that are due the board from all companies governed by the act of its establishment.

He said the board has engaged the country’s judicial sector on how the local content law works with regards to such remittances, and would take measures to ensure that operators who participate in its $200Million local content fund do not end up abusing the process and subsequently deflating the fund.

In his presentation at the Nigeria Oil and Gas (NOG) Conference in Abuja, Wabote said the NCDMB had concluded plans to hand over to the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) any operator who failed to remit what was due to it as requested by the local content law.

“We were told by the agencies responsible for financial crimes that not remitting government fund in itself is a financial crime as it is contained in their acts, and as such, when we carry out this forensic audits, if we discover any breach of the processes, of course, we will hand over such to the agencies responsible to go after companies that want to sabotage the economy. The EFCC and ICPC will be responsible to go after such people who decides that they will not remit what is due government in terms of law,” he said.

SellyFak Targets a Large Piece of the $400Million Local Fabrication Sector

By Akpelu Paul Kelechi

SellyFak Energy, the Nigerian oilfield engineering Service Company, is angling for a significant share of the fabrication, corrosion and control segment of the Nigerian oil and gas industry
“That sector is worth $400Million”, says Stanley Fagbule, the company’s CEO. “And these are conservative estimates”.
Of this volume, it would seem that only about 30% goes to truly Nigerian indigenous companies, Fagbule indicates.
“Let me just clarify one thing,” he tells the Africa Oil+Gas Report, “a SAIPEM, a Daewoo and others will still tell you that they are fully Nigerian companies. But for the “truly” Nigerian companies, I think what they are getting out of that is less than 30% of the whole volume. The biggest indigenous company that is doing fabrication work for the International Oil Companies (IOCs) in Nigeria that I could say right now is Aveon Offshore.”
SellyFak plans to own at least 20% of the market share in the near term. “The company is about twenty years old and over the years, we have been fortunate to do most of the work that we do in the area of corrosion control. We have a base in Port Harcourt that can take care of fabrication works and I would say 80% of the jobs that we do is in corrosion control while 20% is in fabrication but we are trying to balance that that mix for the areas we have capability for. I don’t know how it happens because we have competence for both corrosion control and fabrication but we found We are very active for about six months in a year because coating is done during the dry season. For the other six months, during the raining season, we are not that active but we still need to keep the company running year in year out.”

Uganda: ‘Come Let’s Cash Out Together’

By Toyin Akinosho

Locals Eye the country’s imminent $20Billion Inflow

No one, it seems, is more excited about Local Content Opportunities in Africa’s Oil Industry than Elly Karuhanga(pictured left, above).

A founding partner at Uganda’s top law firm, Kampala Associated Advocates, the serial entrepreneur has stayed on the message for the last three years.
Some $20Billion will be spent in Uganda over a period of less than five years.That’s an incredible amount of money to be spent in a short amount of time.

→   Read the rest of this entry

Ugandan Locals Get 36% of Oil and Gas Contracts

The percentage of upstream oil and gas contracts awarded to Ugandan companies has leaped from 17% in 2009 to 36% in 2016, according to the country’s ministry of energy and minerals. “Some progress is being made”, Ibrahim Kasita, the spokesperson for the Ministry, told an oil and gas Local Content Conference in Kampala.
Mr. Kasita said that more than 1,000 local enterprises have been able to provide services such as logistics, transport and medical services.

Oil was found in commercial quantities in Uganda in 2006.
But activities that should lead to delivery of crude oil into a local refinery as well as export tankers have dragged. It is expected, however, that final investment decision will be made on the development plan for the entire Albert basin by the 4th quarter of 2017. First oil, then, would be expected by early 2021, as a 1,444km pipeline will have to be constructed, 500 wells are estimated to be drilled in the next 3-5 years, two central processing facilities will be installed and maintained, in-field (feeder) pipelines will be constructed, there will be oilfield crude storage tanks/facilities, waste management and treatment and logistical services.

“The country is in transition from the exploration to commercial phase of oil and gas development”, said Edwin Mucai, head of corporate and business banking at Stanbic Bank Uganda, which led the sponsorship of the conference. “To be relevant and competitive in the next phase of Uganda’s upstream development, local companies must take a long term view towards investments and plan a lot more strategically,”

Things have happened faster in the area of government policy, legislation and fostering of an enabling environment in the last three years than they have been in the seven years before them. The Petroleum (Exploration, Development and Production) Act and Petroleum (Refining, Conversion, Transmission and
Midstream Storage) Act were passed in 2013. The Public Finance Management (Amendment) Act, which handles petroleum revenue management, was passed in 2015. Regulations on operations, Health, Safety and Environment (HSE), National Content, Metering and Midstream storage were all promulgated between 2015 and 2016.

After more than five years of hand wringing over issues such as recoverable reserves and production
allowable, the government finally issued production licenses for nine oil fields in the Albertine Graben, Uganda’s only prospective basin. The government has also set up and operationalised the Ugandan National Oil Company, the Petroleum Authority of Uganda and Directorate of Petroleum.

Kasita told the conference that National Local Content regulations are firmly in place in Uganda and embedded within the Oil and Gas Policy, in the Production Sharing Agreements. “They are also in the up-stream and mid-stream laws that require oil firms to employ Ugandans and have ring-fenced certain activities for local service companies,” he explained.
121 exploration and appraisal wells have been drilled in the Albertine Graben to date, including 39 exploration wells and 82 appraisal wells.106 wells encountered Hydrocarbons.

Ghanaian Companies Grab $1Billion Worth of Contracts

Available data from Ghana’s Petroleum Commission, the regulatory agency, shows that the oil and gas sector had provided direct high quality jobs for more than 5,000 Ghanaians as at third quarter 2015.

“The data further shows that between 2010 and third quarter 2015, the value of contracts for services, awarded to Ghanaians amounted to over $1 billion (out of a total of $6.3 billion)”, according to Alex Mould, acting Chief Executive of the state owned firm,  Ghana National Petroleum Corporation GNPC.

“GNPC’s ultimate aim is to get Ghanaians to own a part of the expanding oil and gas industry and domesticate a significant amount of the revenue generated by the sector”, Mr. Mould explained at a lecture: Creating Shared Value, which he gave at the 85th anniversary dinner of the Accra Academy.

“When the oil and gas industry is successful in promoting local content and local participation, the industry also benefits from reduced costs, reduced taxes and import logistics, and from being closer to our suppliers”, Mould explained.  “This is a true win-win scenario and a clear example of creating shared value”.

Mould said that the GNPC, through its partnership with international oil companies operating oilfields in Ghana, has used commercial rationale to exact more value from its partners in the area of local content.“So you have Ghanaian companies like Seaweld, Belmet, Harlequin, and Orsam among others, that are able to do fabrication of critical parts of offshore infrastructure. These Ghanaian companies supply our industry Module Stools, Jumpers, Suction Piles, Sleepers, Risers, Manifolds, and Mud Mats.  And you have Zeal Environmental, Zoil, and OMNI Energy handling the industry’s waste management.  By giving these Ghanaian companies the opportunity and supporting them, the industry gains long term as the companies develop. And by this, we will be creating shared value”.

Ceona and Seaweld Form Ghana Partnership

UK based SURF contractor Ceona, has entered into a significant Joint Venture (JV) with Seaweld Engineering which will act as a strategic partner for offshore deepwater construction projects in Ghana. The British company credits itself with ‘heavy subsea construction capabilities’.

→   Read the rest of this entry

Anchor Piles Being Fabricated in Ghana’s Brand New Facility

Work at the site has started on the fabrication of nine anchor piles for Ghana’s second floating production and storage (FPSO) vessel, which will start producing oil from the Tweneboa, Enyenra and Ntomme (TEN) fields in mid-2016.

The fabrication is underway in a new facility constructed by Tullow Oil in Sekondi in the country’s Western Region. The facility is built on a land leased by the Ghanaian Navy.

Following the completion of the anchor piles in April 2015, the facility will be used to fabricate jumper spools for the TEN Project, which will connect subsea production equipment on the seabed.

Development of the TEN Project is being led by Tullow Oil, with partners Ghana National Petroleum Corporation, Kosmos Energy LLC, Anadarko Petroleum Corporation and PetroSA.

The TEN Development Plan was approved by the Government of Ghana in May 2013 and requires the drilling and completion of up to 24 development wells. These will be connected through subsea infrastructure to a Floating, Production, Storage and Offloading (FPSO) vessel currently under construction in Singapore.

A second new fabrication yard, also commissioned to fabricate components for the TEN Project, will soon open in Takoradi port. Being built by Subsea7, this facility will be used to fabricate anchor piles for subsea manifolds.

Working in collaboration with the Petroleum Commission, the TEN Project is committed to maximising the amount of work undertaken in Ghana. Earlier this year, module support stools for the FPSO were fabricated by Seaweld Engineering Ltd and Orsam Ltd in Tema and Takoradi, subsea mud mats are currently being fabricated by Harlequin International Ghana Ltd and Accra-based Hydra Offshore Group is supplying engineering services to the project.

First oil from the TEN fields is scheduled for mid-2016, and the nominal production capacity of the FPSO is 80,000 barrels of oil per day.

© 2021 Festac News Press Ltd..