Tullow Oil has faced criticism in Ghana for allegedly breaking local content laws, a claim the company rejects.
A lawsuit was filed by the Ghana Oil and Gas Service Providers Association (GOGSPA) to prevent Tullow Ghana from awarding contracts. According to local reports, GOGSPA claimed that any contracts Tullow grants to foreign-owned joint ventures after February 17 of this year will be in violation of the law, which aims to support local companies.
Tullow Ghana confirmed the summons from GOGSPA. The High Court in Accra will hear the application for an interlocutory injunction on October 10.
Since 2010, the company said, it has awarded more than 4,000 contracts to local companies, with almost 3,000 of those contracts going to joint ventures. The total contract awarded comes to $16.83 billion, of which $11.24 billion went to companies with Ghanaian participation.
Tullow Ghana “has been consistent in steadily increasing contracts awarded to indigenous companies and has no desire to replace indigenous Ghanaian companies with foreign companies”. Tullow spent $500 million on local contracts in 2014, and by 2021 this had increased to $1.47 billion.
The company said it would provide no further comments on the matter in order not to prejudice proceedings. Tullow has won awards in the past for its local content dealings, in addition to hosting events with the Petroleum Commission on supporting this work.
Ghana amended an earlier version from 2013 and tightened conditions for local content requirements in 2021.
According to a statement from Accra-based WTS Nobisfields, a joint venture used to call for at least 10% local ownership. The law firm claimed that this might no longer be adequate.
It also noted that for a company to be qualified as indigenous, it must have 100% Ghanaian ownership. Previously, it had been 51%.
The new rules also specify that a number of areas are now only open to Ghanaian businesses. These include offering chase boats, offshore firefighting gear, and high-voltage cables. Additionally, there is a list of chemicals that can only be supplied by regional businesses.
On September 14, Tullow is scheduled to release its half-year results.
