What’s next after AGI’s Oil and Gas Conference?

The Association of Ghana Industries (AGI) in collaboration with the Ghana National Petroleum Corporation (GNPC) and Tullow Ghana Ltd with support from the Ministries of Energy and Trade & Industry successfully organised the First Domestic Content and Matchmaking Exhibition/Conference in the Oil and Gas Industry. The programme which took place at the Accra International Conference Centre from the 17th to 20th May 2010 realised over 150 participants in the conference and more than 30 companies for the exhibition.

AGI deserves commendation for being smart and proactive enough in putting this programme together. The Association’s interest was to facilitate efforts at promoting Local Content in the oil and gas industry in Ghana. The event admittedly brought together players in the industry including the oil producing companies and their subcontractors, as well as local companies who offer various products and services to operators in the industry. This consolidates AGI’s position as the major Association at the forefront of promoting the interest of the indigenous companies.

“The main objective is to help promote business between the local companies and international oil companies operating in Ghana. As the main industrial organisation in Ghana, we feel obliged to help members of the industrial sector to get actively involved in the Oil and Gas industry”, explained the President of the AGI Nana Owusu-Afari. We are all aware of the significant impact that the Oil and Gas sector could make in our national development transforming the economy through the creation of new businesses, development of infrastructure and generation of new businesses. It is therefore of no surprise that the government is actively spearheading this whole local content and local participation agenda. One obvious observation at the AGI’s Conference and Exhibition was that all the local companies were gearing up and positioning themselves to be actively engaged in the Oil and Gas sector. At the Exhibition stands, it seemed suddenly, all our local products and services were focused on the Oil and Gas sector. All the stands were very ready to explain to visitors how their operations were related to the Oil and Gas sector. The well organised programme had very per tinent topics that excited all participants regardless of their fields of operation. Topics included the following:

• Status of Oil and Gas Industry in Ghana, ensuring Ghanaian participation • Local Content Development on Safety, Quality and Standards in the Oil and Gas Industry • Domestic Content Policy & Matters Arising and What You Must Know • Local Content Development, Critical Issues To Know: Experience from Nigeria • Local Content Development, Experience from Trinidad and Tobago • Financing Sources for Domestic Oil and Gas Players My concern as an advocate for the Local Content Policy, not only in the Oil and Gas Sector but all the other sectors of the economy, is whether our indigenous companies are really doing their internal restructuring and building their capacities to take advantage of the new industry. Though the government would seek to provide the enabling environment and opportunities for Ghanaians to benefit from the economic wealth that emanates from the activities in the oil and gas industry through participation of Ghanaians in the ownership, operations, control and management, the onus certainly lies on these Ghanaians and their local companies to avail themselves to such opportunities. “A key element in the local content policy is to maximise the use of local expertise, goods and services, job creation for people, businesses and financing in all aspects of the oil and gas industry value chain. Laudable as it may sound, the question remains as to whether local companies are ready to take up this challenge and maximise the benefits of the oil find”, expressed Nana Owusu-Afari, President of the AGI. I personally believe that no matter how enabling government makes the oil and gas sector for local participation, best practices and quality performance or standards would not be compromised. As a matter of fact, the objectives of the Local Content Policy would remain a mirage if the local companies do not step up in terms of best practices and update themselves with respect to innovations on the international market. Once we take standards and practices for granted, we certainly would experience capital flights, situation where profits from the contracts are repatriated abroad thus providing employment opportunities for citizens of other countries, and in most cases developed countries. This circumstance transpires when most of the service contracts are awarded to foreign firms because our indigenous firms are seen to be lacking the requisite skills, technical expertise, manpower and production capacity and capability to meet standards. President and General Manager of Tullow Oil Limited Mr. Dai Jones told participants at the Conference that business relationships in the Oil and Gas field are not for the short term but over a long period ranging between 30 to 40 years. What it therefore implies is that, instead of our local companies rushing to have a bite of the Oil cake, it’s prudent they do their home works well and come out better. It is clear that the talk about maximising local content and local participation gains or benefits will be meaningless if our companies do not prepare themselves to meet the strict standard requirements for products and services in the oil and gas sector. Already, government has expressed its commitment to ensuring Ghanaian citizens participate in the ownership of all businesses in the oil and gas industry. The policy objective of the government is to give first consideration to Ghanaian independent operators in the award of oil blocks, oil field licenses and oil lifting licenses. But then, the question is, do you think the standard procedures or requirement would be ignored just because one is a Ghanaian? Do you think the quality of products or services required would be compromised because one is a Ghanaian?

Let’s not make this Local Content and Local Participation agenda a mirage. Indigenous companies must see this policy as a challenge to match their international competitors in terms of quality and standards. It’s time to look within and prepare for the oil boom. There is no need to rush because as Tullow boss Dai Jones indicated, “It’s a long term business relationship”.

By Frank Agyemang P.R.O., Reroy Cables Ltd. (agyemangfrank@gmail.com)