The Best Western Atlantic Hotel in Takoradi was the scene for this year’s Local content conference organised by the Petroleum Commission of Ghana. Key players in the oil and gas sector will tell you it’s a big deal on their annual calendars.
It is a show-and-tell time for these companies to tout their achievements in local capacity contribution to the oil and gas sector, and to also project into the future.
The idea of local content has been one of the major expectations of successive Ghanaian governments in relation to the energy sector. When oil and gas went commercial in the country in the early part of the new millennium, the government at the time enlisted a requirement for all foreign companies coming into the sector: “make local content a key feature of your operations in Ghana.” It was a clarion call for all the key players, led by Tullow Ghana, back in those heady days of the discovery.
Now, more than a decade since then, the subject is still a main feature in the activities of the upstream sector. Thanks to pioneering companies like Tullow Ghana and partners, the upstream sector has seen a significant turnaround, reflecting the diversity of Ghanaian companies and human resource currently active in the sector.
Ten years ago, there were less than 100 Ghanaian firms registered and operating in the country. The story is entirely different today. The number of indigenous Ghanaian companies registered and providing goods and services to the industry now, has more than tripled. Additionally, the number of Ghanaians employed in the industry keeps going up with every passing day and some of the more complex and expert roles are now also going to Ghanaians. The recent Tullow Jubilee South-East project delivery, for example, saw a lot of the heavy lifting right here in Takoradi, creating jobs and boosting local skills for the communities and region.
For Tullow and our partners, local content it’s not just about ticking boxes; it’s about keeping a promise. In 2022, Tullow’s local contracts spend reached $169 million, not just as cash but as a way of saying, “Grow with us!” Over the last ten years, they’ve awarded contracts worth a whopping $10.7 billion to businesses with significant local participation in the sector. And get this: they want the Ghanaian workforce to be 90% of their team in the next three to five years; from a current 72%.
“Nurturing local suppliers, enhancing their capabilities, and driving economic value are fundamental to how we do business,” said Wissam Al-Monthiry, Tullow Ghana Managing Director, at the opening of the conference in Takoradi.
Other initiatives like Supplier Market Day, the Supply Chain academy, the sector adoption programme (that delivered Ghana’s first indigenous Flat Confidence vessel operating offshore) and the Local Content Reporting Tool (LCR Tool), are all efforts to empower and upgrade the competence and readiness of local suppliers in the sector. In the first half of 2023, a jaw-dropping 95% of Tullow’s spend went to Ghanaian and joint venture companies. Education is also a big part of the plan. The Jubilee Technical Training Centre isn’t just a place; it’s a launchpad for over 1,000 graduates, many of whom now work in oil and gas. Tullow’s also handing out scholarships and running training programmes, creating a critical mass of future industry leaders.
But it’s not just about the money. Local success stories like Rigworld Group and Seaweld Engineering are like cheerleaders for Ghanaian entrepreneurs, showing that big dreams can turn into big businesses. This is all in addition to the number of individuals graduating from Ghana’s public universities with degrees in Petroleum Engineering and Chemical Engineering among many other related disciplines. These have all found a place in a sector that contributes nearly 6% of Ghana’s gross domestic product (GDP).
While significant strides have been made in promoting local content, challenges exist, including access to capital, sorting out infrastructure, and encouraging the right industry expertise.
However, everyone’s chipping in, from the government to the big players, to make sure local businesses and professionals get the chance they deserve. And as for Tullow Ghana, it is more than talking the talk; it is walking the walk, steering the ship toward a future where everyone gets a piece of the oil and gas pie, amidst a just energy transition.
The years ahead will require more work in terms of industry growth, creating an enabling environment for new entrants and investments into the sector to grow the pie and enhance local content participation.
As one conference panellist noted, “the barriers to entry must be relaxed for both local and foreign players to expand the sector and make it even more viable than it is now.”