Ghana’s true potentialNovember 25, 2021
Egbert Faibille Jnr., CEO of Ghana's Petroleum Commission, talks to The Energy Year about the Commission’s role in promoting upstream activity, its strategy for training and capacity building, and the country’s plans to transition to a gas-fuelled economy. The Petroleum Commission promotes, regulates and manages upstream activities in Ghana.
How has the Petroleum Commission helped the industry during the pandemic?
During lockdown, the Petroleum Commission and the Ministry of Energy came up with a strategy for appraisals. We looked at every upstream activity that required more time as a result of lockdown measures, and on a case-by-case basis we froze those projects’ timeframes.
For those who lost six or seven months, we restituted that time to them. All E&P companies in our upstream space have benefited from restituted time in their development plans, and no one is worse off.
How would you evaluate Ghana’s plan to transition to a gas-fuelled economy?
I believe that Ghana’s position on the energy transition will be communicated clearly during the COP 26 meetings in October 2021.
We all appreciate the need for cleaner fuels for purposes of a sustainable existence. However, I think it is proper to put it in perspective that whilst energy producing nations have their agenda, energy consuming nations also have theirs. Energy security is, however, critical to both the energy producing and consuming nations. There is therefore the need to ensure energy equity so that we can all march towards sustainability with a unified purpose.
I believe that Ghana is working in that direction so that we can all approach the energy trilemma from an informed and beneficial standpoint. Definitely, natural gas for energy supply is the way to go, and Ghana will critically deploy in that direction among other options available.
How is Ghana’s upstream sector regulated?
Ghana employs a hybrid system in the regulation of its upstream sector. Thus, we have a statutory and contractual framework that combine to provide certainty in the regulatory framework. As part of the contractual leg, we have petroleum agreements in place between us and IOCs. The statutory leg has our 1992 Constitution and the Petroleum (Exploration and Production) Act, 2016, Act 919; the Ghana National Petroleum Corporation Act, PNDC Law 64; and the Petroleum Commission Act, 2011, Act 821.
With PNDC Law 64, Act 821 and Act 919 in place, Ghana can be said to have gone the “Norwegian way.” We have GNPC as our NOC, the Petroleum Commission as the regulator and the Ministry of Energy as the policy maker for the upstream sector. It is commendable and sets the country apart as one that is striving for best practices in the management of its hydrocarbon resources.
Aside these laws, other subsidiary legislations such as the Petroleum (Local Content & Local Participation) Regulations 2016, LI 2204, Petroleum (Exploration and Production) Data Management) Regulations, 2017, LI 2257, Petroleum Commission (Fees and Charges) Regulations, 2015, LI 2221, Petroleum (Exploration and Production) (Measurement) Regulations, 2016, LI 2246, Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations, 2017, LI 2258 and the Petroleum (Exploration and Production (General) Regulations, 2018, LI 2359.
All these laws and regulations have been put in place to bring certainty to all players in our upstream sector and to ensure transparency.
The Commission also runs an open-door policy and is on hand to always provide the necessary assistance and guidance to all players in our industry.
How would you describe the Petroleum Commission’s mandate?
The Petroleum Commission was established to efficiently utilise Ghana’s hydrocarbons resources, and we are required to play a role in virtually every stage of the petroleum value chain. We make sure that before a foreign entity undertakes petroleum operations in this country, in accordance with LI 2204 it incorporates a joint venture with an indigenous Ghanaian company at a 10% minimum equity rate.
Among other activities, we superintend the business models that are used to ensure a peaceful coexistence and retention of value in this country. We ensure profits for investors, and we guarantee that indigenous people play a role in retaining some of the profits coming out of whatever venture the investors bring in.
What is the Commission’s strategy for training and capacity building?
The Commission has done and continues to do a lot in the area of training and capacity building for Ghanaians. We do so under our broad mandate to ensure job role localisation in the upstream sector and in furtherance of LI 2204.
We started the Ghana Upstream Sector Internship Programme (GUSIP), which saw the Commission linking graduate engineers and geoscientists to the IOCs and International Service Companies (ISCs) for internships. Some of these interns have graduated to full employment with some of the companies.
By far, the boldest step we have taken is the commencement in September this year of training of 150 young graduates as mechanical, electrical, process and instrumentation technicians at the Jubilee Technical Training Centre (JTTC) at the Takoradi Technical University (TTU). The training is fully sponsored and funded by the Commission under the government’s Accelerated Oil and Gas Capacity Building Programme (AOGC). The 150 beneficiaries will graduate with City and Guilds Level 3 International Vocational Qualifications (IVQ), which will position them to work offshore and in other places within the upstream value chain. This programme is the first of its kind in Ghana.
Our aim is to gradually reduce the number of expat technicians upstream and save Ghana some money by lowering the operating costs of oil and gas companies.
We are also scheduled to send out some 17 tutors from selected technical institutions to the Northern Alberta Institute of Technology in Canada for a period of 10 months to specialise in pipefitting. They will return to introduce pipefitting as a course in our technical institutions.
What are the main challenges related to holding a second bidding round in Ghana?
Moving forward from our maiden licensing round in 2018, we are trying to improve the quality of data available. We are negotiating a number of multi-client agreements for data gathering and related activities to ensure that our second round of licensing and subsequent licensing rounds will have even more quality data.
How would you pitch Ghana as an oil and gas investment destination?
Ghana’s true potential as an oil and gas destination is very evident in the number of reputable companies that are still operating today after the pandemic. We should mention partners like Tullow, Kosmos, Anadarko and PetroSA, along with the ongoing activities at the Jubilee, TEN and Gye Nyame Sankofa fields. Then we have companies such as Aker Energy, Springfield and Eni, who made discoveries just before and during the pandemic.
All investors seek to make a profit, and in Ghana we safeguard that right and aspiration of investors. There is zero political risk in Ghana for investors. Our fiscal regime, which is the royalty tax, is very attractive and rewarding for IOCs that choose to invest in Ghana. Ghana recognises that investors must make returns and we safeguard that right.
As a result, Ghana remains in a unique position despite the pandemic and its global effects. What’s important for us now is how we come out of the pandemic and retain and grow investments in our upstream sector.
So, to the many who are looking to Ghana as an investment destination for oil and gas, I want to say that we are ready and willing to receive them. Our standards are very clear and transparent. We have laws in place and everyone here knows that as far as hydrocarbons are concerned in Ghana, investor rights are very much protected.