…An interview with David Ampofo
- How is the upstream chamber coming along?
Answer: In these times of great change for the industry globally, the Chamber’s role is even more relevant. Now more than ever there is a need for the country and in fact the continent of Africa to develop some clarity around its plans for oil and gas. The Chamber can facilitate the development of a well-informed position and synthesize the different perspectives of stakeholders. We want to be recognized for promoting the best ideas for the development of the industry in Ghana.
- What are your priorities for this year?
Answer: This year we will concern ourselves with three things primarily – how to encourage growth in the industry, local content and the energy transition.
With regard to encouraging growth in the industry, we are guided by a policy of win-win for both government and the companies who form our membership. These include Exploration and Production Companies, International Service Companies and Ghanaian Service Companies. The government continues to make great efforts to attract investment into the sector and seeks to position the country as an attractive investment destination. I think though that whilst attracting new investment is a good thing, we tend to overlook the fact that there are already some major investors in the sector whom we must work with. It is not enough to simply invite investors in and not nurture them. After all, it would be much easier for already existing investors to make further investments than entirely new investors. I worry a bit about the current situation because the perception of Ghana as an investor friendly destination is not the impression that one gets in speaking to some of the companies that are already invested in our oil and gas space. And it is only natural that potential investors seek their views on what Ghana is like as an investor destination. Major players in the industry in Ghana such as ENI and Vitol are having to spend too much time trying to resolve their differences with government rather than focusing on increasing production for growth and prosperity for all. It is holding the industry in limbo and needs to be resolved sooner rather than later. It is holding the brakes at a time when we need to release the brakes.
- What is the situation with production of oil and gas in Ghana?
Answer: It is in decline. We are still reliant on the Jubilee, TEN and Sankofa fields operated by Tullow and ENI. Frankly that is all the more reason why these IOC’s and their service companies should occupy a special place in our plans for the industry. Since 2019, no new petroleum agreements have been signed. As you may know, the few successful bidders from the 2019 bidding round have yet to conclude arrangements with government. It has taken too long. We must remember that the reason we have these partners is because we do not yet have the resources or enough expertise to make good on our God given natural resources. Without further exploration and discovery, growth is not possible. We must be doing all in our power to increase production working hand-in-hand with our current partners. There is an increasing sales pitch for investments into Ghana, which is great; but what is the experience in reality? Our biggest investors in the oil and gas industry are the partners for the three producing fields Jubilee, TEN and Sankofa. How can we get them to do more? It is important we work with them in communicating Ghana’s investment climate by providing a conducive environment for them. Mind you, they can only communicate their experience. It is the same with local service companies. They have also made significant investments in the industry. What is their experience? Too many of them are struggling to survive. They too will benefit when the IOCs expand their operations.
- What is the situation with Local Content and why is it in your plans for this year?
Answer: Local content simply means the participation of Ghanaian businesses and interests in the industry value chain. However, unless there is growth in the overall industry it is futile to talk about growth in local content. There is no increase in local content without a corresponding increase in growth of the industry. That is why we must be focused on growing the pie first rather than scrambling over the dwindling opportunities.
- You also indicated that the energy transition would be a focus for the chamber this year. Can you explain further?
Answer: The Energy Transition is real but there is not a one size fits all approach. As for responsibility for carbon emissions, our footprint as a country is insignificant. Actually, the Ghanaian government has done well over the years in this area. In my opinion we are actually a leader on transition issues. Our energy has been primarily from hydro sources and in the 80’s we moved away from crude to much cleaner natural gas. Today, our power comes from hydro and gas as the main thermal source. We are ahead of the curve. We must use the next 30 years to maximize revenue from our oil and gas reserves as we diversify into cleaner energy. Liquified Petroleum Gas from Atuabo is critical; we cannot afford to let people return to firewood. The President’s speech at COP 26 was an excellent start and set the tone for the direction in which we must go as a country. Natural Gas for Europe’s needs is going to be well sought after from sources other than Russia in the coming years. Could we be a possible provider of gas to Europe by providing incentives that attract new projects while optimizing associated gas evacuation to shore?
- What really keeps you awake?
Answer: Our ability to leverage the current energy transition momentum to monetize our gas resources at this critical time. This will improve energy availability and address energy poverty here in Ghana. I am also concerned about the regulatory environment. Government tends to update regulations without adequately seeking industry input and uses stakeholder events to reemphasize already held positions. There would be greater benefit if the collective input of industry could be more seriously considered working through the Chamber. The Chamber will work hard to synthesize the best ideas from among its membership to promote the industry in Ghana. As I like to say… “We are in this together”.