The Vice President, Dr. Mahamudu Bawumia, has advised Petroleum Services Providers (PSPs), especially the Chamber of Bulk Distribution Companies (BDCs), to develop their capacity by considering merging to become formidable to compete favourably with others in the sector.
Dr. Bawumia said, the idea of merging should be seen as a strategic plan to grow and become very competitive among players in the global industry, rather than seeing it as a means to lose ownership.
He observed that “in Ghana, we like to own hundred percent of everything. Sometimes, five percent of a very big thing is much better”. Mergers he noted, could aid in listing on the Ghana Stock Exchange (GSE) to raise revenue for growth and expansion.
The former Bank of Ghana (BoG) deputy Governor, who said this while addressing the second Ghana International Petroleum Conference (GhIPCON) organized by the BDCs, the Ministry of Energy, the National Petroleum Authority (NPA) in Accra, said this would also enable the companies to compete with multinationals within the sub-region.
He advised the companies to take a cue from companies in the breweries and the telecommunication sectors, to expand their frontiers by venturing into other markets.
“To this end, I encourage the BDCs to consider consolidating their businesses instead of going solo and not being able to list on the Ghana Stock Exchange to raise the needed capital to expand their businesses as well as venture into other markets. Mergers should not be seen as a step to loss of ownership, but rather as a strategy to enhance growth and competitiveness in the long run. Take a cue from the breweries and the telecoms”, Dr. Bawumia advised.
He said, government’s achievements with deregulation in 2015, coupled with other policies it is pursuing, would support his call.
“I am informed that the Ministry is developing a Financing Policy for the Petroleum Downstream Industry. I understand the goal of this policy is to provide strategies towards developing the capacity of PSPs to become competitive and be able to venture into other markets” he said.
The three day international event themed “Realizing the Vision of Petroleum Hub” assembled, hundreds of industry players in the Oil and Gas downstream sector including Oil Marketing Companies (OMCs) and others from parts of the world.
The conference, organized in partnership with Citi FM and as part of the station’s Business Festival, assembled experts and stakeholders in the sector to discuss benefits, challenges and bring out solutions for the growing industry.
The Vice President said, government’s vision to develop Ghana as a petroleum hub for the West Africa sub-region and the continent, “Will serve as new pillar of growth in the Ghanaian economy”.
He noted, the initiative will hasten the growth of the petroleum downstream sub-sector and make it, a major player in the economy and consequently, ensure development of sustainable value, wealth creation and the progress of industry.
The vision to develop Ghana as petroleum hub will require an increase in refinery capacity beyond the current state for both domestic and export adding, it will be prudent for the PSPs to change their current model to meet the plans for the hub. The conference he noted, will contribute immensely to the discussions to achieve government’s vision.
The topics to be discussed include; “Realizing the vision of a Petroleum Hub”, “Finding the optimal balance between foreign direct investments and local participation in the Petroleum Hub”, and “To refine or not to refine? The case for West Africa”.
The rest are “Funding the vision of a Petroleum Hub”, “Harmonizing West African Standards” and “Achieving public safety at petroleum facilities”.
The panelists were experts drawn from a wide cross section of the industry and interrogated and shed light on market and policy shifts required to realize government’s vision of turning Ghana into a Petroleum Hub for West Africa.
This year’s conference had representatives from government, importers, distributors, traders, oil marketing companies, storage operators, ministries and agencies, refineries, petroleum support companies and investors.
The Chief Executive of the Bulk Distributors Companies, Senyo Hosi, said Ghana was well positioned to become a petroleum hub, citing it political stability, favourable location, coupled with industry players’ willing and prepared to bring to life the vision.
Mr Hosi, said the building of the hub, would cost some $50billion, however, government is willing to invest only $5billion, leaving the remainder to the private sector.
He said, though the sector is committed to the vision, it needs to convince itself the systems are in place, hence the conference.
“We need to let government know what exactly it has to do to make sure, this vision comes to live.
“Fifty billion, government hopes to invest $5billion in trying to put together the hub, $45billion we are looking at the private sector. Who is going to put $45 billion in a project if you don’t have the system in place, no way”.
The conference also discussed export dumping, smuggling, public safety, trends in African crude and refined product assessment, prospect of West Africa industry among others.
Mr Hosi said, the wish of the sector players is to see this vision achieved. “It is our aspiration that as a Ghanaian industry, we can contribute to help bring it to life. Every key player is going to help bring to life this dream and we hope to see it in our life time”, he said.
Energy Minister, Emmanuel Boakye Agyarko, reiterated government’s commitment to develop the hub, assuring it “will seriously consider the recommendations of the conference”.