To ensure that the country’s hydrocarbon resources are used for the full benefit of its people, more needs be done in increasing indigenous firms’ participation in the industry, according to Tullow’s Ghana Executive Vice President and Managing Director, Kweku Awotwi.
Mr. Awotwi spoke at the maiden Tullow Ghana Supplier Recognition Awards and Dinner in Accra, and noted that encouraging active indigenous participation is one of the ways to ensure the country’s oil and gas resources become a blessing for its people.
Doing so, he noted, will contribute to socio-economic development of the country and indeed bring prosperity to Ghanaians. “Tullow Ghana’s commitment is to deliver local content and support indigenous companies in maximising value across the oil and gas value chain for the long-term. As a company, Tullow is deliberate about creating opportunities for local businesses in the areas of sanitation, transport & logistics, security, communications, and marine gas oil supply,” Mr. Awotwi said.
Although the use of local expertise, goods and services, people, businesses and financing in oil and gas activities has remained a contentious matter, Mr. Awotwi believes the activities of Tullow Ghana and other players in the industry are gradually leading to an increase of indigenous participation in the sector.
He said it is the company’s hope that “in the next three to five years we can move from an internationally dominated industry to one that is run fully Ghanaian companies”.
To this end, he said, Tullow has over the past years invested in capacity-building for local companies; and as a result, areas such as marine gas supply, logistics and materials, communication, port catering and sanitation services, among others, are now solely provided by indigenous businesses.
Of US$16.4billion worth of contracts awarded by the company between 2008 and 2018, US$10.66billion went to indigenous and joint venture companies with indigenous equity participation.
Between 2008 and 2018, he said, “We also transitioned in this period contracts from international companies to indigenous companies. We know it is not enough; we can do better. It costs us extra money to do this, but because of our commitment to shared prosperity we believe it is the right thing to do,” he added.
Currently, he said, Tullow Ghana contracts are only awarded to indigenous companies or those with local equity participation. He added that the company’s target is to achieve 80 percent of contract commitments with local business participation, and also achieve a 25 percent spend specifically with indigenous companies by the end of 2019.
However, in the first three quarters of 2019, he said, contract commitments to indigenous and joint venture companies with local participation amounted to US$670 million – representing 83 percent of the company’s contract value. Of this, US$240million went to fully-indigenous companies – above the 25 percent target for the year.
“We continue to identify scopes of work which can be transitioned to indigenous companies to deepen our supplier development initiatives, and hence achieve our local content targets for economic development and growth. I congratulate all our indigenous suppliers, and urge them to strive for excellence.”
Since discovery of the Jubilee and TEN Fields, Tullow Ghana has focused on additional value creation by driving supplier development initiatives. Since 2013, 2,800 local businesses have been engaged and educated on Tullow’s contracting processes and how to participate in the company’s business.
Maiden Supplier Awards
The Supplier Recognition event’s goal was to inspire indigenous companies, and drive the pursuit and execution of excellent service delivery and good business practices. It is also to promote and support the government of Ghana’s local content drive and improve local participation in the burgeoning oil and gas industry of Ghana. Tullow thanks all 30 suppliers for their support to date.
The maiden awards saw 30 indigenous suppliers recognised for supporting Tullow’s local content delivery since 2009. In all, 36 awards – including five special awards and one longest-serving indigenous supplier award – were given out.
Some of the award winners included: Consolidated Shipping Agencies Limited, Logistics and Materials service category; Zeal Environmental Technologies Limited, Operations Service category; Orsam Oil and Gas Limited, Projects and Engineering Service category; Oil Field Machine Shop Limited, Well Engineering Service Category; and Rezultz Advertising, Indirect Service category. Mobicrane Limited, a crane and equipment rental firm, received the Longest-Serving Indigenous Supplier award.