The Chief Executive Officer of the National Petroleum Commission, Egbert Faibille Jnr., has disclosed that some 98 contracts worth US$ 389 million have been canceled due to the impact of COVID-19 on the Petroleum industry.
These contracts were awarded by Aker Energy and four other oil companies from the fourth quarter of 2019 to the first quarter of 2020.
Mr. Fabille said the cancellation of these contracts which were meant for local companies, will have a devastating impact on these Ghanaian petroleum support services companies.
The Petroleum Commission CEO said this while briefing the Western Regional House of Chiefs on the petroleum sector.
The Commission also donated 2,000 branded nose masks, assorted disinfectants and locally made automatic handwashing machine to the house.
“Local businesses have been significantly hit by the pandemic. The pre-COVID-19 outlook of the industry resulted in considerable investment in infrastructure, personnel and technologies in anticipation of participation in major projects. Indeed, over 98 contracts worth over $389 million were awarded by Aker Energy, AGM, Eni, GOSCO and Springfield from Q4 2019-Q1 2020. The cancellation of these contracts such as the 5-year Maersk Drilling contract which was terminated in June 2020 together with associated sub-contracts would have a devastating toll on local businesses.”
Egbert Faibille also indicated that the impact of the COVID-19 induced contract cancellation affected local jobs in the oil and gas sector.
“The consequential effect of the cancellation of contracts amidst the already reduced workforce in the industry resulted in lay-offs of both expatriate and local personnel. Over 500 Ghanaian workers in the industry are expected to lose their jobs as a result of the pandemic.”
The Project Evaluation Manager at the Petroleum Commission, Ebenezer Armah, also in a presentation to the Western Regional House of Chiefs said Ghana’s expected petroleum revenue $1.57 Billion saw a shortfall of US$1.04B (GHS 5.7M) representing 63 percent in the 2020 benchmark.
The President of the Western Regional House of Chiefs, Tetrete Akuamoh Sekyim II, commended the leadership of the Petroleum Commission for its COVID-19 prevention relief items support as well as taking time to brief the house on developments in the Petroleum sector.