Monday, February 15, 2010

TULLOW DROPS CITYLINK FOR FOREIGN AIRLINE ...As government t pursues indigenization agenda in oil and gas sector

Tullow Oil Plc, operators of the jubilee oil field in Ghana, has dropped the Ghanaian-owned Citylink airline company in favour of Noordzee Helikopters Vlaanderen (NHV) of Belgium for the transportation of personnel and cargo of the oil company to the offshore jubilee platform.

Public Agenda's checks indicate that NHV's contract took effect after December 15, 2009 when City Link's contract with Tullow expired. This was after NHV had won an international bid opened by Tullow in the course of 2009.
It is understood that Tullow's decision to engage a foreign airline did not sit well with government officials, especially those of the Ministry of Energy, when the matter came to their attention because government is fervently pursuing an indigenization agenda in the oil and gas sector.
City Link's officials have confirmed their disengagement but have declined to speak further on the matter.
Independent sources have, however, said Citylink appeared dissatisfied at the manner in which it was treated and was consulting with its lawyers on the next line of action. According to the independent sources, Tullow had opened the bid without informing Citylink which was its substantive client. The local airline operator was said to have put in a bid upon learning about the process and eventually lost out to the Belgian operator.
Citylink had a renewable contract arrangement with Tullow which was to run out on December 15 2009.
Unconfirmed reports suggest that, factors such as reliability and safety influenced the selection of NHV.
Gayheart Mensah, Communications Manager of Tullow Ghana Limited, could only confirm the disengagement of Citylink when contacted by phone.

Observers of the emerging oil and gas industry believe Tullow's decision jolts the vision of government to entrench local content and participation principles in the oil and gas sector. Local content and participation refers to the level of use of Ghanaian local expertise, goods and services, people, businesses and financing in oil and gas activities.
A yet-to-be-finalised 'Local Content and Local Participation in Petroleum Activities - Policy Framework', which cannot be enforced presently, conveys the desire of government to ensure the control, as well as, the benefits in the oil and gas discovery and production will remain with Ghanaians.
According to the document, the vision of government is to achieve "full local participation in all aspects of the oil and gas value chain of at least 90% by 2020."

An objective of the policy is to increase capabilities and international competitiveness of domestic business and industrial sectors. Apparently, CityLink was muscled out due to its comparative disadvantage to compete. But government could have avoided this situation had it hastened the development of institutional and regulatory frameworks that will govern the oil and gas sector.

NHV was established on 16th of May 1997 at Kortrijk, Belgium. The company indicates on its website that it is specialised in all kinds of helicopter transport and helicopter work in Belgium and surrounding countries. It provides flights for the Belgian and Dutch Shipping Pilot Service, VIPs, hospitals, oil and gas, etc. NHV has a Belgian Helicopter Transport Certificate issued by the Belgian CAA.
According to the company, it has "several contracts with the Oil and Gas Industry to transfer personnel and/or cargo from land to offshore platforms or to transport personnel and cargo between the platforms. Such operations take place from Norwich (UK) and Takoradi (Ghana). Helicopters used for this operation are the Eurocopter EC155 and the AS365N3 Dauphin."

Source: Public Agenda
Author: Frederick Asiamah

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