Exploiting Oil And Gas Services In Ghana

Oil has undoubtedly been the world’s major commercial energy source for many decades and indeed experts are of the view that it will maintain a leading role in the 21st century.

 It is however true that some countries largely endowed with natural resources such as oil and gas often perform worse in terms of economic development   and good governance than do countries with fewer resources.

The best way of ensuring judicious use of such resources is for governments of oil producing countries to institute measures that will give the citizens of those countries active roles in the extraction and production of oil and gas.

Since the oil and gas industry is quite new in Ghana and is very sophisticated in terms of technological requirements, one way of ensuring that Ghanaian companies benefit from the industry will be when the foreign companies are able to transfer skills. 

The truth is that most of the world’s oil producing nations are now earning more from oil services than they do from the direct sale of the commodity.

Over the past decade, the oil industry’s annual spending on exploration and production has increased fourfold (nominal terms) while oil production is up by only 12 per cent. The big services companies, which invest heavily in technology, have been growing by around 10 per cent a year.

Oilfield service (OFS) firms such as Schlumberger are the giants of the oil industry. They do most of the heavy lifting involved in finding and extracting oil and gas. They are far less well-known than the oil firms that hire them, but immensely lucrative.

Schlumberger, headquartered in Paris and Houston, earned profits of $5 billion on revenues of $40 billion last year.

Ghana’s Petroleum Commission is of the firm belief that the country can become the nerve centre of oil and gas services in West Africa if deliberate efforts are made to build the capacity of Ghanaian firms, especially the small and medium scale enterprises to meet the standard technological requirements of the industry.

The essence of the technology and skills transfer is to be able to equip Ghanaian businesses with the requisite capabilities so they can provide excellent oil services. 

According to the Commission, many international oil companies are relocating their regional offices to Ghana “due to the favourable investment climate in the country and the confidence they have in the Ghanaian economy, in the legal regime and democratic credentials.” 

But these positive attributes should be complemented with technical capabilities which can be acquired through the transfer of technology and know-how. 

With oil production in Ghana growing steadily, it has necessitated the need to increase cargo handling capacity of the country’s ports to enable them to provide the critical services and logistics base for the country’s oilfields and the larger hydrocarbon industry.

Some efforts are already underway to improve the competitiveness of local small and medium enterprises operating in the oil and gas sector supply chain.

The Ghana Supply Chain Development Programme, a special initiative of PYXERA Global with funding from the United States Agency for International Development (USAID) has been instrumental in building the capacity of the SMEs.

Director of Special Services at the Petroleum Commission, Mr Kwaku Boateng at the just ended Oil and Gas Summit in Accra announced government’s plan to come up with a national policy on technology transfer in the oil and gas industry.

Indeed the Petroleum Local Content Participation Regulation Act 821 (2013), derived from the Petroleum Commission Act of 2011 sets out the need to promote and maximize local expertise to ensure retention of businesses in the sector.

It also makes provisions for the creation of petroleum related support services aimed at improving economic gain and prosperity.

It is in the light of this that interest in the sector has surged, with local and multinational entities adopting strategies to ensure they are not left out.

Key stakeholders will be brought under one umbrella to form a technical committee which will be tasked to come out a national policy plan for technology and skills transfer.

The plan will identify the skill and technological requirements of the industry and make projections into the future with respect to skills.

The plan will assess the current technology and knowledge base, conduct an assessment of the technology gap now and in the future and come out with an outline which will guide stakeholders in the industry to close the skills gap.

“If for instance there is some knowledge or skills gap in well service testing, the plan will determine what skills are needed and it will identify the skill and technological requirements of the industry and make projections into the future with respect to those skills,” 

The plan will assess the current technology and knowledge base, conduct an assessment of the technology gap now and in the future and come out with an outline which will guide stakeholders in the industry to close the skills gap.

The local content law sets a goal of 90 percent local content in the industry in the next decade. While the law sets medium and long-term goals for various sub-sectors of the industry, some experts are of the view that its prescriptions are highly ambitious.

Mr Daniel Kwarkyi, a welding inspector with the Ghana Welding Authority in Takoradi notes that if the capacity challenges are not addressed, the law risks becoming just lip service to the concept of local content. 

“Ghana must take steps to create a broader plan to develop capacity for local content, involving significant investments in the services sector and training for a technical labor force, in addition to the creation of an enabling environment for both domestic and international businesses,” he suggests.

Mr Kwarkyi laments the absence of a system that ensures that people who carry out welding within the oil industry are qualified and certified according to international standards.

“We don’t have any arrangement to help with the transfer of skills to the local people so our workers can be with the expatriates for five years or more and they will not know how to get qualified and certified,” he said.

Ghana must train and certify its local people to meet the demand for welding and other technical services in the industry.