Tullow Ghana Limited, a subsidiary of London- based Tullow Oil Plc, has been sued by a Ghanaian group of oil and gas service providers.
Tullow Ghana Limited is the lead operator of Ghana’s Jubilee Oil Field.
The group, Ghana Oil and Gas Service Providers Association (GOGSPA), in a motion filed at the Accra High Court (Commercial Division), is seeking the order of the court to restrain Tullow Ghana Limited, its agents assign and any person acting under their instructions from violating the Local Content and Local Participation, (Amendment) Regulations 2021 (LI 2435) in the award of petroleum contracts in Ghana pending the determination of the suit.
The plaintiff said the decision to sue followed many complaints that services reserved for indigenous Ghanaian companies under the laws in the upstream oil and gas sector were being taken away and awarded to foreign venture companies.
The plaintiff said it raised the concerns of the indigenous companies with Tullow in a petition in June 2022, highlighting that any award of contract reserved for indigenous Ghanaian companies to foreign joint venture companies after February 17, 2022, would violate the existing laws regulating the award of petroleum contracts reserved for local businesses.
The plaintiff said the action of the defendant, if not restrained by the court, would lead to the mass unemployment of skilled Ghanaians in the upstream oil industry.
The plaintiff, therefore, prayed for a declaration that the award of petroleum contracts for the provision of goods and services exclusively reserved for indigenous Ghanaian companies under the Petroleum (Local Content and Local Participation Regulations) LI 2204 (as amended) by Petroleum (Local Content and Local Participation) (Amendment) Regulations 2021 (LI 2435) to Joint Venture Companies in Ghana by the defendant is Illegal.
The plaintiff also wanted a declaration that the award of any petroleum contracts for the provision of goods and services reserved exclusively for indigenous Ghanaian companies under Petroleum (Local Content and Local Participation Regulations) LI 2204 (as amended) by Petroleum (Local Content and Local Participation) (Amendment) Regulations 2021 (LI 2435) to joint venture companies in Ghana by the defendant is null and void.
The plaintiff seeks an order from the court directing the defendant to cancel every contract awarded for the provision of goods and services in contravention of the provisions of Petroleum (Local Content and Local Participation Regulations) LI 2204 (as amended) by Petroleum (Local Content and Local Participation) (Amendment) Regulations 2021 (LI 2435)
“Damages in favour of the plaintiff against the defendant,” the plaintiff said.
The group is seeking a perpetual injunction restraining the defendant, whether personally, through their agents, servants or privies or any person acting under their express or implied instruction from awarding any Petroleum contract in contravention of Petroleum (Local Content and Local Participation Regulations) LI 2204 (as amended) by Petroleum (Local Content and Local Participation) (Amendment) Regulations 2021 (LI 2435) and other laws regulating the awards of petroleum contracts in Ghana.
However, in a statement issued by the defendant, Tullow said from 2010 to date, it has awarded over 4000 contracts to indigenous companies, in addition to almost 3,000 contracts awarded to joint venture companies which include indigenous participation.
“Out of the total contracts awarded valued at $16.83Bn between 2010 and 2021, $11.24Bn worth of those contracts were awarded local Ghanaian participation,” the statement said.
It continued that “over the years, 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.
“On the contrary, between 2014 to 2021 when LI 2204 was passed, Tullow Ghana tripled its indigenous contract award spend to up to $1.47Bn compared to $500m in 2014.”
Tullow Ghana assured all stakeholders of its commitment to work with and develop the capacity of local Ghanaians to participate in the oil and gas industry, consistent with our contractual obligations and applicable law.
Tullow Ghana said it does not intend to prejudice the ongoing legal proceedings and therefore no further statements will be issued at this time.
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