GNPC boss calls for “right” local content policies to sustain energy transition
The CEO of Ghana National Petroleum Corporation (GNPC), O-A. Danquah has reiterated calls for the development of appropriate local content policies which he thinks will foster an indigenous talent engine, as far as the country’s domestic energy supply are concerned.
Speaking at the opening of the 2022 Local Content Conference and Exhibition at Takoradi in the Western region, under the auspices of the Petroleum Commission, Mr.Danquah said the industry live in a time of overwhelming global consensus to move away from fossil fuel projects with the objective of achieving Net Zero emissions by 2050.
Africa, he stated is expected to play its part in decarbonizing the energy industry in the face of a potential decline in fossil fuel demand, price, and investment over the medium to long term. The pressure, he adds is very real considering that Africa finances only 11% of its fossil projects and controls only 33% of its production.
“For us in Ghana and Africa, the impetus must be for an equitable or “just” transition which balances both climate change and economic growth imperatives. With a growing population, rapid urbanization and increasing incomes, it is anticipated that the pace of domestic energy supply (which dominantly would be fossil fuels in our life time) will struggle to keep up with demand if the right local content policies are not put in place. Ultimately, the right local content policies fosters an indigenous talent engine that is primarily fueled by technical capability – or to be more specific, the number of active technical workers”
The conference, Mr. Danquah emphasized must, serve as a timely reminder that the sector’s ability to carve a transition path that works, depends heavily on its technical capacity.
In addition, he suggested efforts should be made to strive for commercial self-sufficiency, including encouraging financing from within the continent. “These goals can only truly be realised when local content development operates to its full potential.”
Further, he pointed out, it was his expectation that the key discussion points of the conference would provide guiding lights as to how industry players can maximise local content development within the context of petroleum exploration and development – marginal field development, confronting the implications of the energy transition, financing the oil and gas value chain and addressing issues surrounding the African Continental Free Trade Agreement.
Consequently, the enhancement of intra-African trade highlights an even deeper role for local capacity across the petroleum value chain.
National oil companies like GNPC also hold a significant key to enhancing local content development.
“You will hear more about GNPC’s Voltaian Basin Project later, but I will touch on how we are using this homegrown project to boost local content. The project was born out of the Corporation’s drive for commercial operatorship of its oil and gas assets coupled with a strong national desire for Ghanaians to manage and retain maximum benefit from our petroleum resources. The project aims to culminate in the drilling of GNPC’s first well in the Basin.
As part of exploration efforts, GNPC has acquired and processed a over 3,800-Iine km of 2D seismic data from Phase 1 to 3. Phase 3 is now about 77% complete. In 2023, GNPC will acquire additional 2D seismic data and collect geochemistry samples to further aid our understanding of the basin. GNPC’s local content plan has seen real results. Phase 1 involved 46% local goods and services contracted, while Phase 3 has seen 100% of the goods and services contracted locally. Phase 3 has also involved no less than 95% of indigenous staff employed,” he stated.
The CEO indicated that GNPC will continue to fully implement local content in its E&P operations while we strategically build standby technical capabilities which are both commercially and financially sustainable in the wake of the energy transition.
In the same light, domestic industry stakeholders, should not only serve as passive actors when it comes to local content policies, but need to act as strategic agents in creating an enabling environment for the effective implementation of Local content laws.
