The Ghana Upstream Petroleum Chamber held its annual Ghana Oil and Gas Conference recently. We spoke to its CEO, David Ampofo about the conference.
Q: Can you explain the thinking behind the choice of theme for the conference?
A: We chose the theme “stimulating growth in the oil and gas industry”, very deliberately. As you know the upstream industry has seen a decline in production since 2019 and we are keen to interrogate the issues holding the industry back as well as discuss what steps stakeholders might take to reinvigorate it. We must attract investment into the sector and increase our earnings from oil and gas. The sector has great potential.
Q: What were some of the key activities at the conference?
A: We launched the 2024 annual report on the state of the industry as well as a position paper on ten years of local content. Both reports are available on our website – www.ghanaupstream.com. We will be sharing them with the Ministry and government agencies in charge of upstream petroleum as well as with media outlets such as yours.
I encourage everyone interested in understanding what is going on in the upstream petroleum sector in Ghana to have a look at both reports. Both reports were presented at the conference and were followed by panel discussions that bring government and industry onto a common platform in an environment where we speak honestly to each other and look for increased collaboration.
Q: What are the highlights of your 2024 Annual Petroleum report?
A: The report provides a comprehensive overview of the upstream industry and its contributions to the economy and it includes recommendations for addressing the challenges and for capitalizing on the opportunities.
Key among our recommendations is the need to speed up the appraisals of current discoveries and encourage infrastructure led exploration in order to create a pipeline of development projects.
The report also calls for the optimization of gas utilization to promote the commercial gas sub sector. Our oil and gas is there. We need to get it out with urgency. We could certainly do with a strengthening of our policy regime around exploration.
Q: You speak also of challenges. Can you give us an example of a challenge faced by industry?
A: Business would be a lot easier without the many fees and charges by several government agencies that are introduced every now and then. Incremental taxation is a matter we are keen to draw governments attention to. Imposing new taxation midway through contracts does not help.
Preserving of the sanctity of contracts is a must if more investors are expected. Goal posts are constantly being moved whether it’s taxation or new costs. Things have to be more predictable in any thriving business environment. Not knowing what is going to happen next at any point in time, unsettles businesses.
Also, the hold in payments to our gas producers, the Jubilee, TEN and Sankofa Gye Nyame partners, is a disincentive to domestic gas production. Delayed payments from government makes Ghana a tough place to invest. But I must add that there is increased engagement between industry and government and we hope to make more progress on this front.
Q: Can you speak a bit more about the other presentations delivered at the conference?
A: The other presentations covered the critical subjects of how we monetize our natural gas resources, how we deepen local content in the industry and how we can secure financing for the operations of our Ghanaian service companies. Our natural gas resources are gradually taking center stage. From less than 10% in 2000, Ghana now generates 64% of its electricity from thermal power plants. It’s good.
In our view, natural gas has always been a game changer for Ghana. We made the transition to it long ago when we replaced expensive liquid crude with natural gas as our primary source of fuel for our power plants. Today thanks to our partnership with the Jubilee, TEN and Sankofa Gye Nyame partners, Ghana has its own domestic supply of natural gas.
Unfortunately, though, as indicated earlier, the gas to power payments is at the heart of the matter and there is the need for coordination to ensure that offshore gas production, gas infrastructure, and gas consumption take place at the same time. It is important we ensure payment security and create the right environment to attract significant investments in exploration.
Q: In your estimation, would you say oil and gas is making a difference.
A: Most certainly. The facts are there for all to see. Read the annual report. Without a doubt there is more to be done. The potential this industry holds for Ghana is enormous. There is no gainsaying the fact that this industry can have a bigger impact on the economy, providing the resources that government needs to prosecute its development agenda and making possible the industrialization so badly needed for economic growth.
Fostering a more conducive environment to attract major investment upstream, must surely be the way to go. Working in partnership with government, we at the chamber will do all we can to support the viability and sustainability of the industry so that oil and gas can become the catalyst for the development of the country.
