JV’s to be sanctioned for side-stepping ‘foreign reserve-retention’ policy- Petroleum Commission
The regulator for Ghana’s upstream petroleum sector; the Petroleum Commission, will, as a matter of ensuring compliance to statutory and industrial regulations, sanction any Joint Venture company that disobeys the country’s foreign reserve retention policy. This was announced by the Chief Executive Officer for the Petroleum Commission, Egbert Faibille Junior, at the ongoing Local Content Conference and Exhibition in Takoradi.
According to Mr. Faibille, foreign partners in some Joint Ventures in the petroleum sector have willfully, and without recourse to regulations in the sector, been expatriating chunks of foreign exchange, above thresholds, into accounts overseas.
“Monies that are supposed to be paid into particular accounts by IOC’s, international service companies, and even some Ghanaian companies, for purposes of retentions in this country, are paid into another type of account which by law, and in the course of business, should not receive those forex. And that is a major factor that runs against the cedi’s performance,” he explained.
He disclosed that the Monitoring and Evaluation Department of the Commission has identify a couple of these infractions and, as such, will penalize companies engaged in the act by possibly withholding applications for renewal of their licenses.
As a correctional measure, the Petroleum Commission, will in the next licensing round and renewal, undertake a compliance review on all companies in the sector; and those that fall foul of this act will have their license renewal applications withheld.
“…when you are found out by our M&E, Audit, and Cost Audit departments to be leaving outside the law, we will write to you to comply- go and open an account, if you do not open, and in the next few months, God being so good, you apply to us for renewal of permits, my General Council and compliance man will vet your renewal application and it will be flagged that – this company was found non-compliant with respect to the indigenous Ghanaian bank component of the law. And when it comes to me, I will just minute- suspend action on this application.
“We’ve seen, all of a sudden, a lot of the companies running to indigenous banks and opening accounts and writing to us show us that…” he recounted.
This year’s conference and exhibition is on the theme; ‘Maximizing in-country value addition the role of Indigenous Ghanaian Companies (IGCs) in Joint Ventures in the upstream petroleum Sector’.