Indigenous businesses still operate on the periphery of the oil and gas industry

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File photo of drillers on an oil rig

Although some progress has been made in promoting local content in the oil and gas industry, more needs to be done to indigenize the sector, said Victor Kofi Sunu-Attah, general manager of engineering at the state-owned company. Ghana National Petroleum Corporation (GNPC). .

After 15 years since the discovery of hydrocarbons in commercial volumes and more than 10 years in production, he said, the country still lacks basic skills and few local companies are able to perform manufacturing work. and engineering.

For example, he said local businesses were doing quite well, especially in the ongoing dismantling of the Saltpond platform; but added that manufacturing remains the biggest challenge.

As a result, Sunu-Attah said indigenous businesses continue to lose out in those areas where they would otherwise have been able to add real value to the economy under local content laws.

“We tried everything we could to build capacity; we have increased it a bit, but a large part remains outside the country.

“In service, we need to up our game – even though we’re doing better in engineering than in manufacturing,” Sunu-Attah said.

At an event organized by SPE International in Accra, he spoke about 15 years of oil discovery in Ghana, lessons learned and prospects for the future, and said more needed to be done to ensure that the essential of the industry’s wealth remains in the country.

“In addition to engineering and manufacturing, there are many areas in the service subsector that need improvement. By this I mean legal, financial, insurance and hospitality services, and many more. We don’t have many; we only have a few indigenous businesses that are doing well, and we need more and more to be able to add real value to the economy.

For Ato Aidoo, director of the PES International Ghana section, the country has gone from insufficient capacity in terms of human resource skills to reasonable capacity, 15 years later.

“A lot happened after Jubilee Field until the discovery of TEN and Sankofa OCTP in terms of local content. Sometimes when you look at it, you’re tempted to think it’s not a significant impact, but it is.

“Going forward, what could be most important is how to increase equity participation of local businesses. In terms of manpower, we have done a lot; but in terms of equity participation, local businesses need to put themselves in a position where they are able to have more investment in any partnership they are engaged in. In doing so, they will have the opportunity to build their capacities; not only for the input of manpower but also for the input of technology,” Mr. Aidoo added.

He said, however, that more financial support was needed to help local companies actively participate in the upstream oil sector, while steps needed to be taken to produce most of the raw materials and technologies required by the industry.

Collaborative and deliberate approach

Going forward, Sunu-Attah said a deliberate and collaborative plan is needed to position local businesses to play at the heart of the oil and gas industry.

Explaining further, he said, “To truly get more value from the oil and gas industry and convert non-renewable resources into sustainable resources, there needs to be a deliberate effort by all of us – GNPC, Petroleum Commission, Ministry of Energy – to ensure this manufacturing which requires advanced technology, international codes and standards, regulations and certification will be transferred in the dynamics of industrialization of the country.

Furthermore, he said, in the country’s attempt to indigenize the sector, the Petroleum Commission and the Ministry of Energy should encourage or support GNPC and the Ghana National Gas Company more deliberately to participate. actively involved in oil and gas activities; because it is when these two companies obtain contracts that they will be able to do business with indigenous companies.

“We may also decide that we are not where we should be 15 years after the discovery, and so we want to bring together a few local companies and incentivize them to acquire an oil platform; so that when it comes to drilling in deep or ultra-deep water, the work will fall to the Ghanaians: but this must be deliberate.

“Let’s say an oil field is developed for US$4 billion and the services alone cost about US$2 billion; if you are able to make 40%, that’s $800 million that remains in the hands of Ghanaian companies. There are areas that we obviously won’t be able to play in, but when it comes to something like a platform, we should be able to play a part in it,” he said.

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