LOUD & CLEAR

Ghana 2016 | ENERGY | VIP INTERVIEW

TBY talks to Tony Nwosu, Managing Director of Baker Hughes Ghana, on the hydrocarbons sector in Ghana, local content, and JVs.

Baker Hughes came to Ghana in 2008, and its first big contract was in the Jubilee field in 2011 providing oil field chemicals and associated services. What have been the key developments since you entered the market and how have you established yourself as a player here?

We were one of the early players in Ghana and we came in with a clear, long-term investment strategy. We began investing in our base at Takoradi. As you can imagine, any investment of that nature needs time for it to pay off. We also focused on building partnerships with customers, and eventually Tullow Oil came on board on the chemicals side of things. We also work with Hess, mainly for developing our footprint in the Ghanaian market. We were involved in Hess's first campaign, working with it on a few projects, mainly on the directional drilling side of things. When Hess came back for the second campaign we continued to work on directional drilling projects with it, and then introduced the wireline side of the business as well. Recently the market has been shifting, and we are trying to get into a partnership with ENI in Sankofa.

With low oil prices, companies are trying to reduce spending per barrel. What technologies are you offering to reduce companies' costs and thereby maintain your competitiveness?

Baker Hughes is very big on R&D and constantly looking for ways to introduce new products to the market. With oil prices where they are these days, costs are a very important factor in terms of customers keeping projects alive. We continue to introduce new products to customers, sometimes products our clients have never considered. For example, in directional drilling, most companies will drill their wells with conventional tools or with first generation ultrasound drilling tools. We want to introduce a system whereby you can drill that well without the logging-while-drilling (LWD) technologies, so you can drill and log at the same time, eliminating wireline loss. So you save on drilling efficiency time. Our clients are renting rigs, which is a day-by-day cost, so we help save time with this system. That's one of the innovative technologies that we bring to the marketplace. We do the same in chemicals, with a lot of R&D investment going into the chemical products that enhance production for our clients.

Do you have any problems with post-water production in Ghana?

Some, but not a lot. With the likes of Tullow, we've been injecting a lot of chemicals. Ghana is more likely to develop gas fields than oil fields because it is exploring gas for power. For example, the Sankofa field that ENI is going into right now is just to produce gas for power in Ghana. It plans to drill 15 wells. Drilling will probably take about two years, with production expected in about 42 months. So it's a long-term project. In 2017 there will be another big gas project being initiated as well. With the country's power problems, there's a lot of gas in Ghana at the moment. Therefore, we have a three-pronged approach: improving our footprint in Ghana, developing local capabilities, and developing contact capabilities to provide the right competencies and the right human capacity to serve Ghana's needs, while another key pillar is our partnership with government agencies and GNPC and with their partners as well, because they are key players in this market.

You recently met with the Minister for Power and discussed boosting local content. What sorts of initiatives are you considering?

We have to develop local Ghanaians, improving their competencies and capabilities. The aim is that more Ghanaians can perform roles that have previously been done by expats. We have been doing our share in terms of hiring and training Ghanaians at Baker Hughes, and we continue to develop local talent and human resources. We've also sent many Ghanaians for additional training and specialization overseas. We'll also start forming joint ventures and partnerships with Ghanaian companies, helping them develop their technical abilities and capabilities. That will help us keep our business alive in Ghana and develop our capabilities in Ghana.

Do you expect more joint ventures in the market, and is there any government initiative to push legislation and regulations to enable more partnerships and JVs in Ghana?

Yes, I think that will be the way to go—foreign companies teaming up with Ghanaian companies to forge new paths and projects in the oil and gas sector. The government and the Petroleum Commission have also ensured that local content is a requirement for any company wishing to invest and do business in Ghana. A certain amount of money and funds are required to develop, hire, procure, train, and partner with Ghanaians in Ghana. We are already perfectly positioned to abide by these new regulations, having been here a long time and having already done our share in terms of hiring and working with local Ghanaians and developing local capabilities in the company.

Baker Hughes is in the process of being acquired by Halliburton. How will that affect your future here?

This acquisition and eventual business combination should prove to be positive for the market. These are two companies of about the same size coming together to combine their resources, which will make us the number two or three player on the market once it's completed. Once that happens, of course, we expect the new company will have a new name, since it is an acquisition. And although the Baker Hughes name will be gone, the new company will nevertheless combine the cultures of Halliburton and Baker Hughes, and will have a significant lineage to it, and that will have a very positive impact on the market.

What are your expectations for 2016, and where do you see yourself this time next year?

The ongoing dispute between Ghana and Ivory Coast is slowing things down in Ghana a bit. We are optimistic that it will be settled and won't lead to a spike in activity in Ghana; that would have a negative impact on business here. A lot of companies are waiting for that issue to be resolved. But a business combination of this nature between Baker Hughes and Halliburton means there will be a lot of new opportunities available to us for growth and expanding into new horizons. We'll be working on the ENI project, and we also expect other projects, which are in the works based on discussions with the GNPC and the Petroleum Commission.