A promising outlook for fabrication in GhanaJanuary 13, 2022
Nana Incoom, interim general manager of Belmet 7, talks to The Energy Year about problems facing local fabricators in Ghana and what the company is doing to remain competitive as activity rises. A joint venture between Subsea 7 and Belmet Ghana, Takoradi-based Belmet 7 provides fabrication to the oil and gas sector for both onshore and offshore projects.
What are the challenges associated with production costs and opportunities presented by the recent discoveries and drilling campaigns?
Ghana’s outlook in the oil and gas sector is promising, with Tullow confirming plans to inject capex for future developments, Eni announcing a significant oil discovery in CTP Block 4 offshore Ghana with potential plans to fast-track development with a subsea tieback to the existing John Agyekum Kufuor FPSO, Springfield’s oil and gas projects (Afina), and finally Aker Energy’s confirmation of its commitment to develop the Pecan field – all of which provide a clear indication of a promising future for Ghana’s upstream oil and gas sector.
Production costs play a major role in the viability of upstream oil and gasfield development projects. In recent times, most IOCs have managed to reduce the cost of projects by simplifying and implementing cost-effective technical approaches in their developments to minimise production costs. Nowadays, most IOCs are awarding contracts to companies that are providing cost-effective solutions to their development projects.
The recent discoveries in Ghana will provide some opportunities in the fabrication industry. However, local companies will have to be very competitive in order to ensure that higher fabrication tonnages are earmarked for in-country fabrication. The cost per tonne of production in Ghana is about four to five times more expensive compared to Spain, China and other international fabrication yards. This makes fabrication in Ghana unattractive.
One other issue in the fabrication sector is the capacity and capability availability in Ghana, as well as the expertise available in the country.
What are the opportunities ahead in the country’s fabrication engineering sector?
Fabrication is a key element in the upstream oil and gas sector, so indeed there is a corresponding net effect when exploration, field development and FPSO activities increase.
This increase in upstream activities could also become a catalyst for capex injection and investment by fabrication companies in Ghana to procure more advanced equipment and machinery to cater for the required industry needs. Belmet 7 has invested in equipment and machinery in Ghana to cater for such demands and with the support of its local partnerships can support future increased fabrication demand.
How would you assess the resilience of the fabrication sector in Ghana?
There is a clear and obvious dip in fabrication activities due to the impacts of Covid-19 on the oil and gas industry. To battle this, the company has embarked on some strategic initiatives to ensure business continuity. We have and are still working on all our long-term contracts and still committed to all our existing contractual obligations. In addition, we are still able to support our clients on their projects effectively and efficiently.
Unfortunately, we are still battling with the pandemic and projects have become expensive with the embedment of quarantine costs and other health and safety protocols required to ensure the safety of our personnel and others during project execution.
Belmet 7 has during the Covid era implemented very stringent, practical, and effective health and safety measures in the fabrication yard and to date we have been lucky enough to have not recorded a single Covid case.
Can you give us an overview of Belmet 7’s structure?
Regulation 43(1) of the petroleum regulation (LI2204) serves as a guide to industry players on structuring and formation of joint venture companies. The formation of joint venture companies is guided by Ghanaian laws and is promoted and monitored by the upstream regulating body, the Petroleum Commission.
Belmet 7 is a joint venture between Belmet Ghana (a fully indigenous Ghanaian company) and Subsea 7 (a world-renowned oil and gas company with a wide range of experience within the industry). The relationship brings on board experience, fabrication technology and unparalleled training opportunities for the Belmet 7 team.
Belmet 7 is known for the implementation of a Ghana-made approach where we have maintained only two expats as part of the Belmet 7 team with over 150 Ghanaian employees at peak production periods. Currently, Belmet 7 is operating with 100% Ghanaian personnel and 100% of our consumables are procured in Ghana from local suppliers registered with the Petroleum Commission.
What are Belmet 7’s main contracts?
Our core business is to provide efficient and effective solutions to technical challenges in the fabrication space.
We have supported our clients on the TRP [Turret Remediation Project] with turnkey delivery of topside structures, subsea structures and piping modules (stainless steel and galvanised material). The completion of the fabrication of these complex structures such as the pigging skid (piping and structure), the accommodation module (piping and structure) and a good number of suction piles in Ghana is a huge milestone for Belmet 7. In addition, the offshore tie-in of the abovementioned fabricated structures has been successfully completed with the support of our offshore fabrication teams. It is important to note that we have fully executed all fabrication on the TRP with local personnel only.
Furthermore, we continue to provide maintenance and FPSO upgrade support to our clients in terms of welding and fabrication. To effectively manage this part of the business, we manage, train and maintain a team of Ghanaian professionals in-house to ensure guaranteed quality and support to our clients on such projects.
I would say that the expertise in-country to support potential fabrication maintenance activities on future and current FPSO assets is available. Ghana has a pool of qualified welders and the only bottleneck foreseen is the lack of well-trained fabricators with enough experience and exposure to cut and shape metals to required forms for welding.