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Dwindling Number of Projects Can Undermine Local Content Boost

SIMBI KESIYE WABOTE has invested in a range of midstream hydrocarbon projects since he took charge as the Executive Secretary (ES) of the Nigerian Content Development Monitoring Board (NCDMB) in 2016. He has run with the idea of Nigerian Oil &Gas Parks (NOGAPS), and constructed a 10-year roadmap for nearly tripling the Nigerian local content input (from 26% to 70%). But even he admits that it is “so far, still far”.  In the first of a two-part interview for Africa Oil+Gas Report’s C-SUITE SERIES, he discusses the headwinds, the enablers, and the big wins of his six years in office. Excerpts:

AOGR: You took charge of the NCDMB in the sixth year of the passage of the Nigerian Content Act. Coming from a part of the industry that was perceived as the object of the act, what was the one thing on your mind that you thought had to be addressed in the first, say 30 days?

“Summit Oil will supply crude to Duport Refinery in Edo State…Shell will provide feedstock to Azikel Refinery in Bayelsa”

Simbi Wabote, ES NCDMB: At Shell, where I served for almost 26 years, I had the responsibility to manage local content locally and also eventually, internationally because local content at some point, became a global phenomenon. If you remember the Arab spring in North Africa, started by youths who wanted jobs created. They were protesting Globalization which, allegedly, provided a context in which their jobs were disappearing to China and sent to other Asian countries. Thousands of youths were being trained but there was nowhere for them to go and stuff like that. So Shell asked me , ‘hey we need you to design a global Local Content strategy for us because everywhere we operated, we faced the same problem. Be it in the US, be it in the Middle East, be in Europe, they were facing the same problem which was a reaction to the so-called globalization then.

Here in Nigeria, the population was growing geometrically and people are out of jobs. There are no opportunities for them. I have that passion to say what can we do to change the narrative? I am a patriotic citizen and as such, I should be able to drive it even if I was coming from the IOCs. For the first 30 days or a hundred days, what I needed to establish was (a) to assert myself for people to know that I believe in the course of local content development and (b) is to build the capacity of my staff in the sense that, when I was on the other side, I knew the way government institutions are perceived and looked at in terms of competencies and in terms of ability to match them. I had to make sure that their competencies were developed and I had to make sure that the industry knew that this is a Nigerian that is occupying this seat.

Given the kind of training we had in Shell which essentially is that you must stand for the truth, you must be objective and you must make the right decisions. I didn’t see how that could change me when I took on the position.

What drove the decision that by 2027, you could increase industry spend retained in the country from 26% in 2017, to 70% by 2027. As at today, that’s about five years ago. What needs to happen urgently for you to deliver on the targets fully considering the nature and challenges of the industry?

The first thing I did was ask where was Local Content at the time I took over in 2016, because the ACT was enacted in 2010 and as then, they had the operated for almost seven years before I came on board. I needed to ask myself how they Had fared in terms of the aspirations of the authors of the ACT itself? I bought in KPMG as a consultant to determine where we were in terms of implementation of the ACT. Then together we looked at the capacity in country and established where we were as at 2016 and I then said look, in 10 years’ time, I want us to get to 70% irrespective of where we find ourselves. It is an aspirational target on how we most drive things to get to that 70%. It’s very aspirational but I felt it is doable given the building blocks to attaining that 70%. We had to go through a gamut of workshops to say okay, if you want to attain 70%, what are the things you need to do to get there? We broke things down into five strategic pillars of the things we needed to do and then created some enablers that will enable it happen and of course. Now we have five years to go. But again, like you said, attaining that had a lot of conditions precedence. It wasn’t lost on us. We knew it and we lined up those conditions precedence and then created the enablers to support it.

Of course, one of the greatest factors to get there is the number of projects that we see through and within the system in terms of activities; we took a benchmark where the activities were, we looked at the portfolio of opportunities within a couple of years’ time and factored if those opportunities would be realized, then for sure, we’re going to get there.

We looked at the pitfalls, we looked at the risks associated with it and everything and then we created that roadmap to attaining that 70%. Like every roadmap, you will face challenges as you progress. We see those headwinds, we’re able to address them and we are able to use all the tools we have because part of it is that project must come through.

Out of that desire to attain our milestone targets, we had to work very hard with the minister of State for Petroleum Resources to ensure that the NLNG Train-7 project was sanctioned even in the midst of the COVID-19 because, those are things that will enable that 70% as it were. We looked at other projects in the funnel to say how do we bring them alive? You talk about the Ikike project, which of course saw First-Oil, you saw the active participation of Nigerians there. We looked at the Bonga Southwest, we had thought it would come on stream, but somewhere along the line, it was thrown into the lawn grass again, and then we looked at so many other projects. One of the factors we saw in trying to develop the strategy was the uncertainty in the industry which was instituted by the Petroleum Industry Bill that remained there and our aspiration and desire was to drive and work with all stakeholders to see that that bill became an ACT which of course was achieved. The expectation was that once you clear most of those uncertainties, projects will come. Yes, since it was passed, we can see some bit of inertia within the companies to start to move. But of course, we also faced with the challenge of COVID which hit us and then currently, of course, we are in the election season and most businesses would want to see that that is over before they invest. We still believe that we will attain the 70% because today in Africa and in the world, everybody looks up to Nigeria in terms of what we’ve been able to achieve and pull through in the Local Content arena. We keep pushing and driving that agenda.

One of the things that leap at us when we look at this your growth plan is: “Build effective internal structures in terms of people, skills, processes and systems to support the Board’s operations”. Seven years down the line, do you think you have nailed that down?

Today, the NCDMB is seen as the number one MDA by the Ease of Doing Business assessments. We came from almost 27 to become number one.

And this is as a result of the people. We’ve invested heavily in capacity building of our staff and I’m sure that if you have interaction with them, you will see that we have built their capacity. A lot of our staff feel proud putting on the NCDMB barge and we see that even when we serve in committees with other MDAs. We stand out as NCDMB.. The Ease of Doing Business (a unit in the Presidency) assesses the processes that you have established; how functional they are, how transparent they are. All those were put into a basket. So having attained the number one position, there is no other measure I want to use to test that equally because this was independently done within the office of the Vice President of the Federation; they gave us that rating as the number one agency in terms of ease of doing business and it’s about people processes and the institution itself. I could tell you with all certainty that I don’t know what else is there after number one and that’s what we have achieved.

You don’t want to say that’s number one in Nigeria but it could be a global thing?

What do you mean, comparing globally?

Yes; exactly.

NCDMB is sought after by most African countries that have discovered hydrocarbon. I was in Ghana to deliver the keynote address

“The Africa Energy Fund was an Idea of the NCDMB. We started that advocacy then the idea was taken from us under permission by APPO, the African Oil Producers Association. They had to come to us and say, ‘let’s take this idea and let’s midwife it further’.”

at their Local Content workshop. Every time, every day, you have most of the countries calm down to Nigeria to rob minds with us for us to take them on the path we went through to achieve this objective. It’s not a local accomplishment. Like you are aware, I think one of the local magazines or so also give an award to me as the African Local Content Icon. So it’s to tell you that it’s not a local achievement. Yeah.

One of your concerns, when you took charge, was the dwindling size and value of projects. You said, at the 2017 NOG conference, that domiciliation can only be robust when the (upstream) projects are there. Since then, investment has dwindled and the number of projects have reduced. Are you particularly worried?

Not particularly, but I am very concerned. There are so many factors that you could attribute to that and one of them I have addressed. A key headwind we are now facing again is the climate change issue, which is the raging argument against most of the hydrocarbon related projects. How do we respond to the narrative that highlights fossil fuel as the demon and which threaten to dry up funds that are coming to Africa especially now that every country on the continent is now an oil producing country. These international companies and funders would withdraw funds. What do we do? Let us create the African Energy Fund (AEF) and so we started that advocacy in NCDMB and then the idea was taken from us under permission by APPO, the African Oil Producers Association. They had to come to us and say, ‘let’s take this idea and let’s midwife it further’. I believe that if we don’t do that, there’ll come a time when those investments will no longer come. So we are advocating. When COP-26 happened in Glasgow, the entire fossil fuel was put on the table including gas as part of what will not be pursued. But today, thankfully, gas has been taken out of that and made also green energy as it were. That also helped by the regional conflict between Russia and Ukraine where people now saw the energy challenge because the oil and gas business is not something you can switch off and on.

To develop a field takes you almost four- five years and people have seen that Investments have declined with regards to looking for new finds and the rest of it and the world is heading towards an energy crisis. We keep pushing; we see those hand winds, but we try and say, from our own standpoint, what can we do as NCDMB to support that process?

The NCDMB under you has part funded several midstream projects. Our interpretation is that you want to industrialise the country NOW NOW NOW. It means that you are in a haste but critics may say: why not let this be organic, why are you kind of rushing this?

People who will talk about me rushing it are probably not in this business and they probably don’t understand it. There’s no rush associated with wanting to support the growth of the midstream. If there is anything at all, these are things we should have done like yesterday. As an example, you produced almost 2Million barrels of crude oil every day before but now we are struggling with 1Million barrels of oil which we don’t add any value to. You sell all your crude and you import refined products. I mean, how can you explain that? If you are not in a hurry, what else will you be? You look at your gas and you pride yourself that you have almost 206Trillion cubic feet of gas yet, there is no gas available to run your power plants in the country. And 60% of Nigerians perhaps, don’t have access to electricity. What else will spur you on to be in a hurry, is it when Armageddon comes that you will been a hurry? All we are trying to do is catch up because the world is moving on. Today, with an abundant of hydrocarbon beneath our feet, we are still struggling; the world is thinking of other forms of energy. When are we going to get there if we don’t quickly get to do what we have to do in order to bring Nigeria to where it’s supposed to be?

Some people look at what you’re doing and try to make comparison with other projects that are already in the pipeline or under construction. So they look at Nigeria Oil and Gas Parks (NOGAPS) initiative and they say, that looks like the Gas Master Plan that didn’t happen. Is it now going to happen just because NCDMB is driving it?  Yet some would say that NOGAPS is competing with the Ibigwe Industrial Park and the Utorogu Industrial Park. Why are you competing with all these private resources?

I think if I take it from this perspective, Nigeria is not an industrialized Nation. Manufacturing capacity is extremely low in the country and for us, we want to be seen as acting like a catalyst for the industrialization of this country. We’re not in the forefront. We don’t have enough resources to be in the forefront of it. But, let us do good examples that people can see and say it is doable. That’s where we come in. For instance, when we decided to work with Waltersmith to build a modular refinery, a 5,000 barrels per day modular finery, we wanted to catalyze it and we wanted to prove it that it is doable.  Today, the Waltersmith refinery in Ibigwe is running non-stop; they don’t even have a product storage in their tank because as they produce it is taken away. What we didn’t want to be as NCDMB is to talk about things without showing people that it is doable. That’s where we don’t want to be. We don’t want to keep talking about establishing manufacturing base and we are not showing people that it is doable. That’s why you see us in those Industrial Parks. Our industrial park is just a mini 25 hectares industrial park, but we want to show people that if you put your heart to it, it can be done. If you go to Odukpani today, we’re almost there to commission the industrial park, if you go to Yenagoa, as a matter of fact, in all the flooding that happened in Yenagoa, our Industrial Park was not flooded including our head office because it was taught of about properly and it was constructed properly. We do what we say. We don’t want to be the preacher who tells people to do something but turns around and says look, do what I say not as I do. Ours is to say do what we say and as we do. That’s what we are trying to proveWhen we started working with Waltersmith to start the modular Refinery, it wasn’t what was thought about but we did it and within a record time of 18 months. We got the refinery running. It’s one of those good examples that you can think of and we try to touch other areas; also in the gas business today, almost 70% of our partnership, our investments, are in the gas area. Be it storage facilities for LPG, be it SPC Distribution Network to ten northern states of the Federation. We have no capacity to muscle out anybody, but we have capacity to show people that it is doable.

The Board (NCDMB) recently reported it had secured the approval of its Governing Council for a partnership to produce 123,000 metric tonnes per annum LPG, which is about 10 percent of current demand nationwide, from the Utorogu Gas Plant, in Warri, Delta State. That would mean a partnership between that company on one hand and NPDC and ND-Western, joint operators of the Oil Mining Lease (OML) 34, where the Utorogu field is located. But the feelers from the industry is that this same company approached Seplat for the same thing and the deal broke down because they didn’t even show up to build anything, let alone receive the gas. After the Seplat challenge, which Seplat sources say, smacks of PGID, the sense we get from NPDC is the same sense of frustration with this same company. Are you sure of them?

Southfield Petroleum?

Yes.

Southfield Petroleum is a company we are partnering with in order to produce LPG within the Utorogu field. Currently the company is in discussion with Utorogu gas plant, which is a joint venture between ND-Western and NPDC. First, before the project will go ahead, they will be sure that there is a gas availability and then that commitment has to be on the table because currently where we are at now is the feed development for the project itself; but before we will beat our chest that we have secured that project is to ensure that all the i’s are dotted and the t’s are crossed. It’s within the project development funnel and one thing we must understand about investments in general today is that, if you go and speak to Elon Musk and ask him about how many businesses did he invest in and he didn’t succeed, he will probably give you a catalog of what he tried and he didn’t succeed at but with the ones he succeeded at, he is where he is today. Talk to Bill Gates, talk to Zuckerberg, nobody can tell you that every Investments they’ve been into was a success and that’s the challenge we have in Africa.

The averse appetite for risk-taking is even in us as a people, let alone talking about investment. Take our sense of adventure: some adventures that you see the Caucasians engaging in, you just have to think and ask yourself: How many Africans will want to go and climb Kilimanjaro? How many Africans will want to enter the sea and swim with a shark or with a Whale? These are risks that people take in order to understand nature and these are serious risks. But send an African, particularly in Nigerian man, he will hardly want to take any risks as it were. So with Investments globally, you must continue to push the boundaries and some of them will succeed while some of them will not succeed. But if you want to wait for everything you get involved in to succeed, you’re not going to go anywhere as a person or as a country.

So that -Utorogu-is a good project and it is still work in progress. We’re still pushing and believing that it will come to fruition as quickly as possible.

The NCDMB has succeeded in helping to deliver one modular refinery that has been working now for the past two years. It has also invested in two others, but refineries that are not built on producing fields always have challenges of feedstock supply. What’s the guarantee that these refineries will not be sitting idle?

“We looked at the Bonga Southwest, we had thought it would come on stream, but somewhere along the line, it was thrown into the lawn grass again, and then we looked at so many other projects.”

One of the things we look at in our Investment Portfolio is particularly this risk you have identified because we know that there are some companies that invested in refineries that are not close to producing assets and they’re having some bit of challenges or the people involved are not holders of marginal fields or acreages; those risk are there. But when you look at refineries globally, some of the very big ones are not close to any field or assets. They still procure the crude and they refine and then they sell. Dangote refinery in Lagos is not close to any field. He didn’t own a field when he started the refinery, probably does now, but when he started the refinery project, he didn’t have an asset. He built it on the export mindset. If you go there and you see the intake and outlet, you will know that it is an export mindset. But most of the ones we got involved in are close to producing assets. For instance, the Duport Refinery in Edo State is just about 200 metres from Summit’s oil field and Summit is also a partner in the Duport Midstream. Azikel Refinery that we are involved in is just about 200 metres away from the Shell Gbaran-Ubie gas plant and it is a condensate Refinery and that gas plant produce a lot of condensates and there is an agreement between Shell and him for the supply of condensate. And so we look at all those risks and that’s why we didn’t get involved with a lot of modular refineries that came knocking because the first thing we asked them was where is your feedstock? Where is the agreement for you to get your feedstock? We know it’s always a challenge.

Duport refinery may be ready sir, but we know that Summit is not producing their field as we speak.

As at last week, Summit told me that they were ready because they have done some bit of simulation on their wells and the rest of it; so they too are also working. Yes, Dupont is ready, but they have to align themselves with Summit. Summit like you know, was producing before now. It was heavy on gas and condensate and that Refinery, the Dupont refinery, is a condensate refinery that was designed to receive condensate. I think they are addressing their issues; our inability to open up the refinery right now is predicated on two issues: one is to get DuPont really ready which of course they’ve been trying to do all this while and also to get Summit to also come on stream. I believe very soon they will resolve whatever the issues are and the refinery will start producing.

Let me ask you what you think about this. Do you think Shell will genuinely supply from Gbaran to Azikel knowing that the IOCs don’t typically deal with small projects: 1 or 2 thousand barrels wouldn’t excite Shell will it?

I believe that they will. Like I said earlier, I spent my whole adult life perhaps working for Shell and I know that if Shell commits to doing something, they definitely would do it. They don’t sign an off-take agreement if they don’t mean it because that’s how disciplined they are. I genuinely believe they would do it because I was part of that process; I serve on the board of Azikiel and we went through the process with Shell to sign the off take agreement. The challenge is now for Azikel to get ready and as a matter of fact, earlier this year had to ask me to say “hey, what’s happening with this agreement? We’re still waiting to trigger off that uptake”. They’re really keen and they also see it as a way of also supporting Bayelsa as a State and they also see it as an obligation to support such aspiration. The refinery is just an 11,000 barrels Refinery. So that won’t create any dent with regards to their products supply.

TO BE CONCLUDED.

 


Ghana’s Local Content Fund Rakes Close to $5Million

In 10 years of commercial scale crude oil production, Ghana has raked up $4.5Million as proceeds from oil companies into the local content fund.

The amount is indicated in the latest report of the Public Interest and Accountability Committee (PIAC), an independent statutory body mandated to promote transparency and accountability in the management of petroleum revenues in Ghana.

Receipts into the fund are superintended by the Petroleum Commission, the country’s upstream regulatory agency, which is empowered to implement the deduction of 1% of the sum of any upstream contract.

Ghana’s local content and local participation regulations (L.I 2204) were promulgated in November 2013, “to inter alia promote maximisation of value-addition and job creation through the use of local expertise, goods and services business, financing in the petroleum industry value chain and their retention in Ghana”.

The Local Content Committee established by the Board of the Petroleum Commission is required to oversee the implementation of LI2204.

The Petroleum Commission, in the last one year (January to December 2020), established and resourced a Local Content Fund Secretariat at its headquarters in Accra. It appointed an Interim Coordinator of the Fund, who was endorsed by the Minister of Energy. It also developed a draft Local Content Fund Operational Guidelines.

This story had earlier been published in the January 2021 edition of the Africa Oil+Gas Report.

 


Fortress-Sellyfak Muscles into Ghana’s Oil Patch

Fortress Sellyfak has joined the list of local engineering service companies, poised to take advantage of the growing upstream hydrocarbon industry in Ghana.

The country is on course of producing in excess of 200,000Barrels of Oil Per day in 2019, with close to 200Million standard cubic feet of gas per day, three times the import of gas from Nigeria.

These fluids are produced from Tullow Oil operated Jubilee field, Greater Jubilee and TEN cluster of fields as well as the ENI operated Sankofa-GyeNyamme fields,

“Fortress-Sellyfak is a joint venture company specialized in Asset Integrity Maintenance,  Fabrication & Manufacturing and Equipment Rental in the Ghana Oil & Gas market”, the company says on its website. “Our cutting-edge technologies, inspiring workplace and ‘’can do’’ attitude endear our clients and attract the industry’s leading innovators”, it adds.

Ghana has witnessed three FPSOs commissioned on the three producing properties the 11 years since the first major oil discovery was made. A fourth FPSO is expected to be installed between 2022 and 2023 when Aker Energy commissions the Pecan Field.

Field optimisation, asset maintenance and field development opportunities make Ghana a very attractive place for this new company.


Equatorial Guinea orders cancellation of all contracts with CHC Helicopters

Calls on Oil companies to comply with local content regulations

The Ministry of Mines and Hydrocarbons of Equatorial Guinea has mandated all petroleum operators including but not limited to Noble Energy, Exxon Mobil, Kosmos Energy, Trident, Marathon Oil Corporation and other operators to cancel all contracts with Canadian-based CHC Helicopters, due to noncompliance of Equatorial Guinea’s national content regulations.

“It is the responsibility of the Ministry of Mines and Hydrocarbons to ensure strict compliance to our country’s National Content Regulation of the Hydrocarbons Law,” said H.E. Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons. “These laws are in place to protect and promote local industry, create jobs for citizens, promote the sustainable development of our country, and we are aggressively monitoring and enforcing the compliance of these requirements.”

Oil companies operating in Equatorial Guinea have been given 60 days to unwind contracts and find new suppliers, with only those companies in compliance with the local content provisions established in 2014 allowed to bid for contracts.

A compliance review of the entire sector is ongoing led by the Director of National Content and outside legal advisors of the Ministry.  The notice will be expanded to all service companies who are non-compliant as the review continues. Similar measures will be taken. 

Under the National Content Regulation of 2014, all agreements must have local content clauses and provisions for capacity building, with preference given to local companies in the award of service contracts. Local shareholders must be part of every contract as prescribed by law. The operators have an obligation to ensure compliance of their subcontractors. 

“We are eager to work with international companies who partner with Equatorial Guinea in the development of our industry,” said the Minister. “But we expect all companies operating in Equatorial Guinea to follow the laws of the Republic of Equatorial Guinea. As Minister, I will not hesitate to enforce the law to ensure compliance”.


“We Will Send the EFCC After You”, Wabote Warns

By Sully Manope

Simbi Wabote, the former Shell Nigeria Director who is now Executive Secretary of the Nigerian Content Development Monitoring Board (NCDMB), has announced the takeoff of a forensic audit of remittances that are due the board from all companies governed by the act of its establishment.

He said the board has engaged the country’s judicial sector on how the local content law works with regards to such remittances, and would take measures to ensure that operators who participate in its $200Million local content fund do not end up abusing the process and subsequently deflating the fund.

In his presentation at the Nigeria Oil and Gas (NOG) Conference in Abuja, Wabote said the NCDMB had concluded plans to hand over to the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) any operator who failed to remit what was due to it as requested by the local content law.

“We were told by the agencies responsible for financial crimes that not remitting government fund in itself is a financial crime as it is contained in their acts, and as such, when we carry out this forensic audits, if we discover any breach of the processes, of course, we will hand over such to the agencies responsible to go after companies that want to sabotage the economy. The EFCC and ICPC will be responsible to go after such people who decides that they will not remit what is due government in terms of law,” he said.


SellyFak Targets a Large Piece of the $400Million Local Fabrication Sector

By Akpelu Paul Kelechi

SellyFak Energy, the Nigerian oilfield engineering Service Company, is angling for a significant share of the fabrication, corrosion and control segment of the Nigerian oil and gas industry
“That sector is worth $400Million”, says Stanley Fagbule, the company’s CEO. “And these are conservative estimates”.
Of this volume, it would seem that only about 30% goes to truly Nigerian indigenous companies, Fagbule indicates.
“Let me just clarify one thing,” he tells the Africa Oil+Gas Report, “a SAIPEM, a Daewoo and others will still tell you that they are fully Nigerian companies. But for the “truly” Nigerian companies, I think what they are getting out of that is less than 30% of the whole volume. The biggest indigenous company that is doing fabrication work for the International Oil Companies (IOCs) in Nigeria that I could say right now is Aveon Offshore.”
SellyFak plans to own at least 20% of the market share in the near term. “The company is about twenty years old and over the years, we have been fortunate to do most of the work that we do in the area of corrosion control. We have a base in Port Harcourt that can take care of fabrication works and I would say 80% of the jobs that we do is in corrosion control while 20% is in fabrication but we are trying to balance that that mix for the areas we have capability for. I don’t know how it happens because we have competence for both corrosion control and fabrication but we found We are very active for about six months in a year because coating is done during the dry season. For the other six months, during the raining season, we are not that active but we still need to keep the company running year in year out.”


Uganda: ‘Come Let’s Cash Out Together’

By Toyin Akinosho

Locals Eye the country’s imminent $20Billion Inflow

No one, it seems, is more excited about Local Content Opportunities in Africa’s Oil Industry than Elly Karuhanga(pictured left, above).

A founding partner at Uganda’s top law firm, Kampala Associated Advocates, the serial entrepreneur has stayed on the message for the last three years.
Some $20Billion will be spent in Uganda over a period of less than five years.That’s an incredible amount of money to be spent in a short amount of time.

→   Read the rest of this entry


Ugandan Locals Get 36% of Oil and Gas Contracts

The percentage of upstream oil and gas contracts awarded to Ugandan companies has leaped from 17% in 2009 to 36% in 2016, according to the country’s ministry of energy and minerals. “Some progress is being made”, Ibrahim Kasita, the spokesperson for the Ministry, told an oil and gas Local Content Conference in Kampala.
Mr. Kasita said that more than 1,000 local enterprises have been able to provide services such as logistics, transport and medical services.

Oil was found in commercial quantities in Uganda in 2006.
But activities that should lead to delivery of crude oil into a local refinery as well as export tankers have dragged. It is expected, however, that final investment decision will be made on the development plan for the entire Albert basin by the 4th quarter of 2017. First oil, then, would be expected by early 2021, as a 1,444km pipeline will have to be constructed, 500 wells are estimated to be drilled in the next 3-5 years, two central processing facilities will be installed and maintained, in-field (feeder) pipelines will be constructed, there will be oilfield crude storage tanks/facilities, waste management and treatment and logistical services.

“The country is in transition from the exploration to commercial phase of oil and gas development”, said Edwin Mucai, head of corporate and business banking at Stanbic Bank Uganda, which led the sponsorship of the conference. “To be relevant and competitive in the next phase of Uganda’s upstream development, local companies must take a long term view towards investments and plan a lot more strategically,”

Things have happened faster in the area of government policy, legislation and fostering of an enabling environment in the last three years than they have been in the seven years before them. The Petroleum (Exploration, Development and Production) Act and Petroleum (Refining, Conversion, Transmission and
Midstream Storage) Act were passed in 2013. The Public Finance Management (Amendment) Act, which handles petroleum revenue management, was passed in 2015. Regulations on operations, Health, Safety and Environment (HSE), National Content, Metering and Midstream storage were all promulgated between 2015 and 2016.

After more than five years of hand wringing over issues such as recoverable reserves and production
allowable, the government finally issued production licenses for nine oil fields in the Albertine Graben, Uganda’s only prospective basin. The government has also set up and operationalised the Ugandan National Oil Company, the Petroleum Authority of Uganda and Directorate of Petroleum.

Kasita told the conference that National Local Content regulations are firmly in place in Uganda and embedded within the Oil and Gas Policy, in the Production Sharing Agreements. “They are also in the up-stream and mid-stream laws that require oil firms to employ Ugandans and have ring-fenced certain activities for local service companies,” he explained.
121 exploration and appraisal wells have been drilled in the Albertine Graben to date, including 39 exploration wells and 82 appraisal wells.106 wells encountered Hydrocarbons.


Ghanaian Companies Grab $1Billion Worth of Contracts

Available data from Ghana’s Petroleum Commission, the regulatory agency, shows that the oil and gas sector had provided direct high quality jobs for more than 5,000 Ghanaians as at third quarter 2015.

“The data further shows that between 2010 and third quarter 2015, the value of contracts for services, awarded to Ghanaians amounted to over $1 billion (out of a total of $6.3 billion)”, according to Alex Mould, acting Chief Executive of the state owned firm,  Ghana National Petroleum Corporation GNPC.

“GNPC’s ultimate aim is to get Ghanaians to own a part of the expanding oil and gas industry and domesticate a significant amount of the revenue generated by the sector”, Mr. Mould explained at a lecture: Creating Shared Value, which he gave at the 85th anniversary dinner of the Accra Academy.

“When the oil and gas industry is successful in promoting local content and local participation, the industry also benefits from reduced costs, reduced taxes and import logistics, and from being closer to our suppliers”, Mould explained.  “This is a true win-win scenario and a clear example of creating shared value”.

Mould said that the GNPC, through its partnership with international oil companies operating oilfields in Ghana, has used commercial rationale to exact more value from its partners in the area of local content.“So you have Ghanaian companies like Seaweld, Belmet, Harlequin, and Orsam among others, that are able to do fabrication of critical parts of offshore infrastructure. These Ghanaian companies supply our industry Module Stools, Jumpers, Suction Piles, Sleepers, Risers, Manifolds, and Mud Mats.  And you have Zeal Environmental, Zoil, and OMNI Energy handling the industry’s waste management.  By giving these Ghanaian companies the opportunity and supporting them, the industry gains long term as the companies develop. And by this, we will be creating shared value”.


Ceona and Seaweld Form Ghana Partnership

UK based SURF contractor Ceona, has entered into a significant Joint Venture (JV) with Seaweld Engineering which will act as a strategic partner for offshore deepwater construction projects in Ghana. The British company credits itself with ‘heavy subsea construction capabilities’.

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