Ghana is taking a lot of lessons from nearby countries and putting good regulations in place.

Sanmi LONGE Managing Director INTERNATIONAL ENERGY SERVICES

Ghana: A regional powerhouse

July 23, 2018

Sanmi Longe, the managing director of International Energy Services, talks to TOGY about the Ghanaian market compared to its regional neighbours, the electrical infrastructure in the country and the contracting process in the country. International Energy Services, which started in Nigeria in November 1990, offers services in oil and gas, power engineering and infrastructure.

• On the business climate: “When businesses come, it is easy for the citizenry to be accommodating and tolerant, which has helped the oil industry and investors in Ghana. The regulations are also very good. Ghana was able to take a cue from many economies that were not able to manage their wealth well and implemented regulations to make the business climate fairer, which is really helping local content capacity building.”

• On the market: “The development of oil and gas in Ghana has been very steady, consistent and predictable. This has made it a very good country of reference for oil and gas growth in this part of the world, which has always been bedevilled by various local conflicts and scrambling for oil wealth.”

• On the power market: “In electrical engineering, unlike oil and gas, Ghana is well developed. Before my company came here, Ghana was already supplying 24-hour power. There has been a lot of improvement in the network, and a lot of projects surround network improvement.”

• On outlook: “Local content is being strengthened and compliance is much more enforced and complied with. We see a situation where local competence will grow and expand, new service areas will be explored, and benefits will be evident in the economy. The bid rounds will be coming up. Most of them will still going to be at the exploration stage for the next two or three years, even more.”

 

Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find an abridged version of our interview with Sanmi Longe below.

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How would you describe the oil and gas industry in Ghana in comparison with other African countries?
The development of oil and gas in Ghana has been very steady, consistent and predictable. This has made it a very good country of reference for oil and gas growth in this part of the world, which has always been bedevilled by various local conflicts and scrambling for oil wealth. Ghana has not been like that. Ghana is taking a lot of lessons from nearby countries and putting good regulations in place, following the processes and procedures to do all this.
Some countries in Africa suddenly got oil wealth when they were not prepared for it, which has created imbalances and a total shift of focus from the primary industry that could have really built the country. Where you have greedy leaders and politicians, the wealth created from it will be mismanaged and there will be imbalances.
I have read many publications stating that Ghana’s oil revenue has been channelled through committees for infrastructural development and that many local content committees of the regulators and oil majors are doing very well in the procurement process. They are doing a lot of monitoring and a lot of things have changed over time. Ghana is building a hub with local firms and professionals by training a lot of people and getting them into projects. Many projects are taking off now and tremendous progress is being made to achieving the goals of the government in the industry.

How strong is Ghana’s electrical infrastructure?
In electrical engineering, unlike oil and gas, Ghana is well developed. Before my company came here, Ghana was already supplying 24-hour power. There has been a lot of improvement in the network, and a lot of projects surround network improvement. The personnel and expertise are there. When we came in and started projects in that area, we never thought of getting foreign personnel support from our parent company or elsewhere. The personnel were here. The projects started with almost 100% Ghanaians.

Is it easy to invest in Ghana?
There has been an improvement in the contracting process since Petroleum Commission was founded. Initially, a lot of companies were not satisfied with the openness and the business process of getting jobs in oil and gas, especially when you are not giving the opportunity to show competence, but things have actually improved over time. There is now a lot more openness in tendering and contracting. More is known about the service requests that are coming up in the industry and the companies that are winning the jobs. Many companies are also partnering together, so even if you lose one bid, you can still work with your colleague as a subcontractor or partner to work in the industry and help the economy.
Ghana is used to foreigners, tourism is a big industry here. When businesses come, it is easy for the citizenry to be accommodating and tolerant, which has helped the oil industry and investors in Ghana. The regulations are also very good. Ghana was able to take a cue from many economies that were not able to manage their wealth well and implemented regulations to make the business climate fairer, which is really helping local content capacity building. Ghana has also been able to avoid dangerous situations.

What is the outlook for work in the services sector?
It looks very promising. Local content is being strengthened and compliance is much more enforced and complied with. We see a situation where local competence will grow and expand, new service areas will be explored, and benefits will be evident in the economy.
The bid rounds will be coming up. Most of them will still going to be at the exploration stage for the next two or three years, even more. Currently companies in exploration phases will lead on to production. It takes a lot of time and careful planning because you need to get the oil in commercial quantities.

For more information on the Ghanaian market, see our business intelligence platform, TOGYiN.
TOGYiN features profiles on companies and institutions active in Ghana’s oil and gas industry, and provides access to all our coverage and content, including our interviews with key players and industry leaders.
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