Increasing Spate of Maritime Piracy and Armed Robbery in the Gulf of Guinea-West African Coast

 ….Implications for the maritime sector

Maritime piracy, armed robbery and terrorism are terms used to describe violent acts carried out by malevolent actors operating at sea. We typically correlate the latter with acts of war committed by rogue ideologues, while the former connotes criminal activities committed by brigands for profit. 

Such characterisations are shortsighted and fail to demonstrate the true meaning of the terms. Moreover, they invite conjecture about the nature of these threats and the factors that give rise to them.

Recent suggestions that a nexus may be forming between pirates and terrorists add further obfuscation to understanding the differences between them. Although there are similarities between the perpetrators of these acts, there are also defining characteristics that allow us to distinguish one from the other.

Policymakers must be able to clearly distinguish these two phenomena in order to develop effective counter-measures.

 The intent of this paper, however, is to establish the implications from the rising incidence of piracy along the West African Coast (Gulf of Guinea) on Ghana’s growing maritime sector.

There has been an increase in piracy and armed robbery against ships operating on the coast of West Africa or Gulf of Guinea.  In the last two years, there have been quite a number of reported piracy cases which threaten to undermine the safety and security of the maritime industry across the sub-region. 

It has been reported that Piracy in the Gulf of Guinea has now overtaken piracy in Somalia waters. A report by the International Maritime Bureau (IMB) and other seafarers’ groups indicate that 966 sailors were attacked along the West African Coast in 2012, compared with 851 off the Somali coast which previously recorded higher numbers of attacks. 

Unfortunately, maritime piracy along the coast of West Africa differs from that off Somalia and may eventually prove harder to deal with. While on  the Somali coast there is a large concentration of patrolling warships -- from the US Navy, NATO, the EU and others as well as reconnaissance aircraft, all acting in a coordinated fashion -- the Gulf of Guinea has several national coastlines to patrol with no single unified policing body.

The sudden increase of pirate activities in the Gulf of Guinea and the increasing threat of terrorism in neighbouring Nigeria have raised grave security concerns to oil shipments in the West African sub-region; and these are undoubtedly too close for comfort as far as Ghana’s oil installations are concerned. 

Definition 

Despite serving as the representative body for international peace and stability, the United Nations (UN) does not offer a satisfactory definition for terrorism, armed robbery at sea or piracy.  For instance, piracy is defined by the UN in Article 101 of its Convention on the Law of the Sea (UNCLOS) as an act of violence or robbery carried out for private ends against another ship or person while on the high seas (Division for Ocean Affairs and the Law of the Sea, 1982). This definition is ambiguous and restricts how states may pursue piratical instances vis-à-vis international law.

Similarly, the UN has not been able to provide the international community with an acceptable definition for terrorism. Not having a universal definition for terrorism is problematic in itself, but it becomes more difficult when states must distinguish between piracy, terrorism, and other acts of maritime depredation.

Implications for Ghana’s Maritime Sector

The current situation of increase in reported maritime piracy and armed robbery cases along the Gulf of Guinea should be a major concern to maritime Authorities, as it surely will have negative consequences on the maritime sector in West Africa -- and Ghana, for that matter. 

Apart from the insecurity and high business cost this threat poses to the maritime sector of West African states along the West African coast, there is also the risk of reduced competiveness of shipments to and from West Africa going through the Gulf of Guinea.    Some of the most foreseeable negative impacts of this development on Ghana’s maritime sector would include:

1.     High freight cost

Due to the insecurities along the Gulf of Guinea arising out of the many reported piracy cases, ship owners and charterers would be circumspect in traversing the Gulf of Guinea because of the potential of piracy attacks. Consequently this may increase the cost of freight of shipments to the West African Coast which includes Ghana’s maritime domain.

2.     High insurance premiums

The increasing incidence of piracy in the Gulf of Guinea may also lead to higher insurance premiums -- leading to higher importation costs.  Ship charterers will surely increase their insurance premiums to mitigate any potential effects of pirate attacks.

3. Increase cost of shipments

The cost to the shipper will certainly increase because of the high freight and insurance cost as a result of measures to mitigate the risk of piracy for vessel on voyages along the West African coast and Ghana.

4. Lower vessel calls at the ports.

Increased piracy attacks if unchecked have the potential of eventually increasing the risk profile of the West African Coast, and this will serve as a drawback to vessel calling at our ports -- which would eventually render our ports redundant.

5. Loss of revenue to the state

The maritime sector in Ghana is by far the highest contributor to our revenue base. More than 80% of Ghana’s revenue comes from levies and taxes from imports. Lower vessel calls at our ports would certainly affect our cargo throughput, and hence assure lower revenue generation.

6. Loss of jobs

If the spate of piracy and its attendant consequences are not curbed, it may lead to job-losses in the maritime sector because of the negative effects it will have on the ports’ ability to operate at optimum levels, thereby affecting the downstream maritime sectors in terms of job-losses.

7. Negative impact on the national economy

Loss of revenue resulting from low productivity of the maritime sector may have negative implications on the national economy. There could be shortfalls in revenue, depriving the economy of needed capital for socio-economic activities.

Loss of jobs as indicated above, owing to the reduced port operations and parallel operators, would lead to unemployment and effectively put more stress on the nation’s GDP.

8. High cost of living

The failure of the maritime sector to support the national economy as a result of growing piracy activities may also lead to hardship and higher cost of living for the populace.  Higher cost of imports will lead to higher prices and increased inflation.

9. Reduced competitiveness of Ghanaian shippers

The effects of increased piracy activities in the Gulf of Guinea also affect Ghana’s maritime trade competiveness. High shipment cost, high insurance premiums and general cost of doing business will lead to reduced competitiveness of our shippers.

10. Risk of terrorist activities

Piracy and Maritime Terrorism are difficult to differentiate, and the increasing spate of piracy in the Gulf of Guinea may lead to terrorist organisations infiltrating our maritime waters -- given that there is also a growing level of militancy across West Africa as witnessed in Mali and Nigeria with Islamic fundamentalist groups like Boko Haram etc.

11. Threat to national security

Increasing piracy cases in the Gulf of Guinea have negative implications for the national security of West African states and Ghana.

Increased piracy and armed robbery cases may result in destabilising West African states, including Ghana, leading to insecurity. Maritime infrastructure such as the ports and oil installations could eventually be potential targets for pirates and their extremist associates.

Conclusion

As indicated in respect to the various form and shapes that maritime terrorism or piracy may take, it is clear that when they do happen they have the capacity to cause a great deal of dislocation in supply chains -- with disastrous consequences.

Indeed, a large-scale terrorist or pirate attack at a major port could not only cause widespread death and damage but also paralyse the international maritime trading system, thus causing rapid disruption to global commerce.

In Ghana, a terrorist or pirate attack on any of our maritime facilities and infrastructure is bound to have a telling effect on our economy.  As indicated with respect to the value of the logistics chain, our progress and prosperity is dependent on our international trade.  Cocoa, which remains a major foreign exchange earner, largely relies on imports to feed its production process and has to be exported through the ports to earn vital foreign exchange for the country. 

And so it is with the other foreign exchange-earners such as manganese, bauxite and other non-traditional products.

Government’s Treasury relies on import and export duties for about 70% of its budgetary requirements.  There are also taxes from port operators as well as the providers of ancillary services all through the supply chain, banking, insurance and haulage services.  Thus, any act of maritime violence that affects the supply chain will significantly affect government revenue and hence the provision of social services.

Ghana has invested a lot in its infrastructure both at the ports and off-shore.  Any destruction of these facilities through a terrorist attack or pirate activities would represent a severe setback likely to hinder our attempts at attaining middle-income status through export-led growth.

Any major security breach occasioned by acts of maritime terrorism would affect the level of confidence reposed by the international community in our transport systems, and is likely to be disastrous as it would completely erode our competitive edge and dash our gateway dreams.  

Our ports would become “leprosy ports” where no vessels would want to call.  Where they do not become leprosy ports, there is a great likelihood that premiums for war risks would increase to very devastating effect.

Even though marine cargo insurance covers the risks of terrorism and piracy during the ordinary course of transit, the international insurance market is loath to cover specific acts of terrorism. 

An attack on our maritime infrastructure would cut the flow of goods and services, which would stifle internal trade and lead to hyperinflation.

Therefore, Ghana must lead the way in fighting the growing incidence of piracy in the Gulf of Guinea for its own national interest and that of the rest of West Africa.

Ghana must show leadership at the ECOWAS level in tackling these difficulties because of our particular interest.

In addition, government must equip our navy to be in readiness to repel or deal with any incidence of piracy within our territorial waters. 

This would require investment in equipment and, more importantly, capacity building on the part of our navy personnel.

There must also be close collaboration between naval commands and maritime Authorities among ECOWAS member-states, and intelligence-sharing to deal with this growing spate of piracy.

Ultimately, each sovereign nation must take urgent steps to protect its waters, and the collective objective should be to rid the Gulf of Guinea of piracy and its attendant implications for Ghana’s maritime security and competiveness in international trade.

Oil production shoots up

Ghana’s Jubilee oil field has hit 83,000 barrels per day (bpd) this month following success with an acid stimulation exercise conducted by field operator Tullow Oil and partners, an ECOBANK Research report has stated.

US Kosmos Energy, one of the Jubilee field partners recently announced that production was now at 83,000 bpd due to the success achieved with an acid stimulation programme on one of the wells.

The Jubilee oil field may finally be on the path to reaching earlier production targets of 90,000 barrels per day (bpd) following an increase in production in August.

Since the start of 2012, Jubilee production had settled around 70,000 bpd; Kosmos reported an average production rate of 63,100 bpd in Q1 while Tullow reported 67,000 bpd in May.

However, average production in August is likely to be above 80,000 bpd. The partners plan to conduct acid stimulation on other wells; two new production wells are also expected to come on-stream before the end of 2012, which will boost production beyond 90,000 bpd.

The report by ECOBANK Research stated: “Success at the Jubilee field supports our optimistic outlook on Ghana’s crude oil potential. On base estimates, the Jubilee field is believed to hold about 800 million barrels, which at a peak production of 120,000 bpd would guarantee Ghana at least 18 years of production and revenue from export sales.”

“The potential is greater if the country is able to further de-risk Jubilee field reserves estimates of 1.5 billion barrels. Tullow has also estimated that the upcoming Tweneboa, Enyenra and Ntomme (TEN) fields hold an average recoverable reserves potential of 360 million barrels of crude oil.

“This boost to production will cost the Jubilee partners at least $1.1 billion at completion as the remediation program includes the drilling of eight new production wells, which could take another 14 months to complete. Furthermore, the acid stimulation exercises conducted on some of the wells were at an estimated cost of $30 million - Kosmos Energy reported its share of the costs to be $10 million.

“Success at the Jubilee field supports our optimistic outlook on Ghana’s crude oil potential,” it said.

At base estimates, the Jubilee field is believed to hold about 800 million barrels, which at peak production of 120,000 barrels per day will guarantee Ghana at least 18 years of production and revenue from export sales.

This could easily be more if the country is able to further de-risk Jubilee field reserve estimates of 1.5 billion barrels. Tullow has also estimated that the upcoming Tweneboa, Enyenra and Ntomme fields hold an average recoverable potential of 360 million barrels.

Furthermore, Ghana’s offshore oil exploration area is firmly situated in the West African Transform Margin in the Gulf of Guinea, which the United States Geological Survey (USGS) believes hold an estimated 33 billion barrels of crude oil.

This is continually been reaffirmed by discoveries offshore Ghana, Cote d’Ivoire, Liberia and Sierra Leone. Ghana’s oil reserve potential is largely still under-explored and could compete favourably with Nigeria’s offshore potential.

This notion has already attracted considerable investor interest, more recently from South Africa’s National Oil Company, PetroSA which has bid for local Ghanaian firm Sabre Oil & Gas’s stake in the Jubilee field.

Jubilee production should peak in 2013 at a rate just above 120,000 bpd. This would lift Ghana above older mid-tier producers such as Chad, Cameroon, Cote d’Ivoire and the Democratic Republic of Congo (DRC). 

Jubilee field partners are also fast-tracking plans to develop the Tweneboa, Enyenra and Ntomme (TEN) field. A plan of development (POD) for TEN will likely be submitted before the end of 2012. 

Production could start from those fields by 2015, further boosting Ghana’s production to 150,000 bpd or more. Within a full year of production, crude oil is now Ghana’s third largest export revenue earner after cocoa beans and products and gold, the highest revenue earner.

In spite of the good tidings, there are some challenges that need to be scaled.

The report said: “Ghana is yet to pass its new petroleum bill also, creating some uncertainty about new fiscal terms for oil operations. The country is likely to seek to increase its share of revenues from crude oil production. Already the government has announced its intention to include a clause in the new regulation compelling oil producers to set aside a portion of their production for local consumption.

“The major local consumer will be the Tema Oil Refinery (TOR), which has struggled to pay for crude oil imports in 2012 - it received a loan from a consortium of lenders in June. Oil producers are unlikely to find this favourable”.

Meanwhile, explorers operating offshore Ghana and in proximity to Cote d’Ivoire could face some loss of acreage in the on-going dispute between the two countries over maritime boundaries.

This situation particular affects parts of the Jubilee field where the TEN discoveries were made, along with the Owo and West Tano- facilities ahead of plans to access gas from these fields, generating concerns from operators such as Kosmos Energy and Tullow Oil.

Nevertheless, Ghana has taken several positive steps. The Public Interest and Accountability Commission (PIAC), established in 2011 has published its first report on the management of 2011 petroleum revenues.

The report provides comprehensive information on how funds were managed and identifies lapses that need to been adopted by several more companies in the upstream sector. Local content regulations are on the card to ensure Ghanaian interests are protected.

Further demarcation of blocks has been put off to enable the development of new regulations and positioning of the state-owned Ghana National Petroleum Corporation (GNPC) to participate as an operator in some oil blocks.

Newmont’s Akyem mine gets approval

The board of Newmont Mining Corporation has approved funding for its estimated 7.2 million ounces equity reserves, located in Akyem, in the Ajenua Bepo Forest in the Eastern Region, expected to start in early 2013.

Adiki Ofeibea Ayitevie, Regional Manager Communications of Newmont, told B&FT: “The approval of the funding would facilitate the awarding of critical mining contracts, purchasing of equipment and continuing the settlement of compensation.

“Newmont has so far concluded negotiations with communities and has started payment of compensation to displaced parties.

“More than 1,700 households are expected to be paid compensation for loss of immovable structures and farmlands. Out of that, about 300 households will be resettled - and so far 80 percent have been paid crop compensation.”

The project has about 15 years mining life and is expected to produce between 480, 000 and 550,000 ounces of gold annually for the first five years of its operation.

Initial capital cost is estimated at between US$700 million and US$1billion.

The Board has cleared Akyem through the fourth-stage gate in Newmont’s four-gate project review process, which roughly equates to bankable feasibility approval.

The company expects Akyem to add to its production base and payrolls while exhibiting leadership in safety, environmental stewardship and social responsibility.

Newmont views its Africa region as a growth-engine for the company, and the Board’s decision on Akyem reflects confidence in building on its successes in Ghana.

Newmont’s Ahafo Mine and Akyem Project together have approximately 17.4 million equity ounces of proven and probable gold reserves - representing about 20 percent of Newmont’s global equity reserves of 86.5 million ounces of gold as at the end of the 2008.

The Ahafo mine poured its first gold in 2006 and commenced commercial production in the same year. Ahafo sold 202,000 ounces of gold in 2006 and was expected to produce between 410,000 and 450,000 ounces of gold in 2007 as the mine entered its first full year of production.

It currently produces about 500,000 ounces of gold annually from its three mining pits, which also have 15 years of mine life.

Newmont purchased both the Ahafo and the Akyem projects as part of the Normandy Mining acquisition in February of 2002.

The company said it will continue to partner with its key stakeholders including local communities, local government, traditional authorities and local businesses to create shared value through jobs, workforce training and economic and social development in the areas around the project.

Newmont has recently been granted a mining lease and environmental permit from the Environmental Protection Agency to commence the Akyem project, and engineering for the project is about 70 percent complete, Ayitevi said.

“Following completion of further economic and power analysis to ensure sustainability, the project will advance to its next phase of development which will involve the building of the mining plant to pave way for the full-scale mining production,” she said.

“We are still engaged with the community to determine appropriate compensation. We are also undertaking a rapid access survey to help determine the real custodians of the land. It’s going to be to be a continuous process.”

Mrs. Ayitevie indicated that the company’s commitment to its social responsibility at the Akyem project has been studied extensively by international and national environmental experts, members of the communities living in the area, and by agencies and departments of government.

The Akyem project has for the past five years, been subject to a thorough environmental impact study, public consultation process and an independent review process.

“Newmont’s industry leading performance is reflected through Newmont Ghana’s high standards in environmental management, health and safety and creating value and opportunity for its host communities.

“In implementing our commitment, the company assures all individuals with farms and immovable properties, which have or will be impacted by our Akyem Project, that they will be duly compensated consistent with the express provisions in the Minerals and Mining Law and relevant provisions in the Constitution of Ghana.

“This will ensure that conflict at the mining community is minimised and also position the company as good corporate citizens,” Ayitevie stated.

Access Bank to merge with Intercontinental

Nigeria's Access Bank says it will merge with local peer Intercontinental Bank, one of nine lenders rescued in a US$4billion central bank bailout 18 months ago.

The two have signed a Memorandum of Understanding (MOU) for the purpose of business combination of both institutions, which will result in the emergence of one of Africa's largest financial institutions.

The MOU signing follows the completion of a competitive, rigorous and transparent selection process and the approval of the Board of Directors of both banks.

In accordance with international best practices, the process will be subject to necessary shareholder, regulatory and judicial approvals.

When reached for his comment, the MD for Access Bank (Ghana) Ltd, Yomi Akapo, explained: “The MOU announcement is a declaration of intent by both banks to combine their businesses. In transactions of this nature, there are processes and key steps that will necessarily follow an MOU signing. There are several regulatory, and shareholder approvals that must be obtained, and we will communicate further periodically as the process progresses.”

Access Bank Chief Executive, Aigboje Aig-Imoukhuede, said the two institutions are a perfect match but gave no details on the terms of the deal, which still needs approval from the central bank and Securities and Exchange Commission.

"These are two organisations that share potential synergies and are very complimentary in terms of what is strong in one is not strong in the other," Aig-Imoukhuede said.

"This is an ideal ground for a value-adding business combination," he said.

The combination of Access Bank Plc and Intercontinental Bank Plc is of systemic importance and safeguards a significant degree of capacity in the Nigerian banking sector that would otherwise be lost in the event of non-resolution of any of the rescued banks, said a statement jointly issued by the two banks.

Critically, the Transaction provides a safe harbour for the depositors of Intercontinental Bank Plc and the seamless continuation of banking services to Intercontinental Bank's considerable customer base.

The resulting footprint of the combined entity and its increased access to low-cost deposits combined with Access's recognised competence in commercial banking, robust balance sheet and proven track-record, supported by a culture of strong corporate governance and risk management, will create a market-leading platform from which the combined entity can capitalise on growth opportunities.

The business combination will offer unique opportunities for both institutions. The Retail banking operations of Intercontinental Bank coupled with the Wholesale and Commercial banking strength of Access Bank offers a high degree of synergy and complementarity that is unique in the Nigerian banking environment.

The synergy from combining the two banks will therefore create a formidable competitor with scale to rival the top banks in the industry.


Access Bank Plc continues to be a remarkable story of transformation and phenomenal accomplishment considering its antecedents. The Bank has through a combination of inorganic and organic growth spread its tentacles and consolidated its footing on the Nigerian banking landscape over the last 10 years, to rank among the top-10 Banks in the Nigerian banking industry.

After taking over the Old Access Bank in the year 2001, Access Bank Plc acquired Marina Bank and Capital Bank (the former Commercial Bank (Crédit Lyonnais Nigeria)) by merger to increase its coverage in Nigeria. In 2006, the Bank began an intelligent expansion in 8 other countries across sub-Saharan Africa’s three monetary zones (WAMZ, SADC and UEMOA) which saw acquisitions in Omnifinance Bank, Banque Privée du Congo and Bancor SA in Rwanda among others.

It therefore comes as no surprise that Access Bank has taken advantage of the current inorganic growth opportunities to create a combined entity that will rank in the Top 3 in the Nigerian banking sector by Gross Earnings and Total Assets.

The combined entity is also expected to capitalise on growth opportunities across the markets in which the Bank operates, resulting in a formidable competitor to other African tier-one banks.

Intercontinental was established in 1989 as a pure merchant bank and converted to commercial banking just over a decade later. It grew to become a major player in sub-Saharan Africa's second-biggest economy, at one point being the country's largest bank by Tier 1 capital.

At the end of last year, its shares were 86 percent free float and 14 percent held by the directors.

Central Bank Governor Lamido Sanusi praised for the 2009 bailout and efforts to sanitise the banking system, which was dangerously close to collapse.

The removal of several bank chiefs - including former Intercontinental chief executive, Erastus Akingbola, for lax oversight and reckless lending - sent shockwaves through a corporate elite that had grown used to impunity.

Intercontinental is the second of the rescued lenders to announce an agreement with new investors after Union Bank said late on Tuesday it had agreed a US$750million deal with a consortium led by African Capital Alliance private equity firm.

Rescued lenders Afribank, Bank PHB, Finbank and Oceanic Bank have also held talks with potential investors in recent months.

Source: B&FT

Marketers urged to improve competence

Ghanaian Marketers and entrepreneurs have been urged to position and prepare adequately for multinational investors, as the country is continuously viewed as a stable haven and a place to do business, Alhaji Ibrahim Awal, CEO of Chase Petroleum, has said.

“Marketers and entrepreneurs must improve business competence and be ready to take advantage of the peaceful democratic business environment and partner investors who will be in the county to commence business operation.

“This would not only promote job-creation, but would position the country as a place in the sub-region - attracting huge investment due to superior business delivery,” he stated.

Awal, the 2009 Marketing Man of the Year, said this to business executives, marketing professionals, government officials and entrepreneurs in Accra at the launch of the 22nd Chartered Institute of Marketing Ghana (CIMG) 2010 Awards, slated for July 23, 2011.

Making a presentation under the topic ‘Entrepreneurial Marketing-Tool for Repositioning’, he said: “In today’s competitive environment, those who are entrepreneurs understand the marketing concepts which companies have used over the years to sell their products and services.

“A successful entrepreneur understands and appreciates the blend of products, place, promotion and product strategies that will produce a satisfying exchange with the target market.”

Mrs. Josepine Okutu, National President of CIMG, explained that the awards over the years have contributed significantly in promoting sound human and corporate marketing performance - apart from the euphoria that the event has generated.

She stated that the CIMG awards is an event that corporate Ghana has been looking forward to on yearly basis because it serves as one of the critical benchmarks by which these groups measure their performances.

“It is this expectation from stakeholders that has been the catalyst spurring us on to come out with themes and criteria that are relevant and beneficial to corporate Ghana.

“The theme for the awards has been carefully chosen to acknowledge local industry consisting of indigenous people, who are contributing significantly to the growth of the country’s economy.”

Shola Safo-Duodu, Head, Corporate Affairs Barclays Bank Ghana, and Chairperson of the 2010 Awards Planning Committee, indicated that the ceremony will seek to encourage and empower local businesses and entrepreneurs to develop and compete globally.

The awards to cover 31 categories will include four personality awards, three Hall of Fame awards, seven media awards, one not-for-profit organisation award, 14 business awards and two product awards.

The awards selection bodies will be working closely with the governing council of CIMG, Association of Ghana Industries, Ministry of Trade and Industry, Ghana National Chamber of Commerce and Industry, Ministry of Tourism and reputable research organisations.

Vodafone launches Healthline initiative

Vodafone Ghana has launched a new initiative, ‘Healthline’, aimed at educating, empowering and informing Ghanaians about pertinent health issues.

The initiative will use qualified medical experts to offer advice on pertinent health-related issues to Ghanaians in all the ten regions of the country.

The project, which takes the form of a television and radio show, will embark on a project to solicit basic health questions from Ghanaians which are to be answered by medical doctors.

Carmen Bruce-Annan, Head of Corporate Communications Vodafone Ghana, at a media interaction in Accra said: “It is sustainable because we want to empower people to think differently about their health, and that cannot be done in thirteen weeks.

“We want people to think differently and be passionate about their health by having the facts on issues that concern their health.

“We picked health because it affects everybody; including the rich and the poor, illiterate or literate.

“Regardless of your status, your life can be enriched and you can be empowered by having the right information about your health,” she said.

“We’ve embarked on this initiative because we want to change people’s approach to issues concerning their health, by empowering Ghanaians with knowledge and information about health issues. The project will ultimately educate the public and demystify health-related issues and practices,” Bruce-Annan said.

Galaxy Oil launches Rymco lubricants

Dr. Joyce Aryee, Chief Executive Officer, Ghana Chamber of Mines, has officially launched Rymco lubricant for the country’s downstream petroleum market.

“Rymco lubricants are expected to play a critical role in the mining industry, where 40 percent of capital is spent on maintenance to lubricate equipment to minimise friction.

“The Chamber of Mines and its members are also concerned about the environmental hazards associated with the disposal of lubricants, and has instituted mechanisms to ensure proper disposal of containers to protect the environment.”

Dr. Aryee told this to participants comprising technical experts, mechanics, players in the marine and mining industries, and automobile dealers among others at the official launch of the products in Accra.

Rymco lubricant is manufactured in Holland by VPS International and distributed by Lubes Engineering and Marketing Limited, a subsidiary of Galaxy Oil Ghana Limited - a major player in the lubricant-distribution sector in the country.

Mr. Erik Vermeer, Export Manger of VPS International, explained that top-quality materials are used to produce Rymco with the users in mind.

“Rymco lubricants have been specifically selected to suit the country’s conditions. The product includes automotive engine oil, automotive transmission and gear oil, industrial oil for hydraulic systems and gears, marine lubricants and specialty oil for mining, construction, power, and energy equipment.

“Until recently, the lubricant-distribution sector was the preserve of transnational oil marketing companies such as Texaco and BP among others, but a vacuum was left after most of these companies withdrew their services,” Mr. Vermeer said.

Mr. Emmanuel Dadson, General Manager, Lubes Engineering and Marketing Company Limited, said: “The Company will not just sell the products to customers but make use of technical expertise to help select grades that provide functional and emotional benefits.

“We shall offer after-sales visits and train technical staff of our customers to apply the lubricant in a most-efficient manner in order to promote profitability.”

He assured that Rymco lubricants will protect any kind of equipment or engine if properly applied, stressing that the company will ensure reliable supply to customers by using the forecourts of Galaxy Oil, independent suppliers and direct distribution.

Rymco lubricant is approved by international specification authorities such as the International Standards Organisation (ISO), American Petroleum Institute, and Society of Automotive Engineers. It is also recognised in over 60 countries for its quality and high performance.

Atlas Copco unveils powercrusher

Atlas Copco Ghana Limited has officially unveiled its mobile power-crushing range of equipment for the country’s quarrying, mining and the construction sectors.

The equipment - Powercrusher jaw crusher, impact crusher and screen box - has been robustly manufactured and designed to stand up to the toughest conditions with huge output capacities.

It has excellent quality of end-products due to the efficiency of the fines removal and also the ability to process difficult in-feed materials because of its feeder. It has, as well, excellent transport dimensions for optimised mobility, higher capacity and consistent wearing over the entire jaw faces.

“Years of valuable customer input have allowed for the optimisation of these impact units, James Cammock, Regional Product Manager, Powercrusher-West Africa told stakeholders from construction, mining and the quarry sectors in Accra at the ceremony to officially launch the products.

The programme afforded the company an opportunity to interact and share experiences with its customers, to further improve product delivery to customers in the country and within the sub-region.

“From 1992 to date, Atlas Copco Ghana has contributed to the local mining and construction industry with world-class products and services, ranging from compressed air and gas equipment, generators to heavy duty construction and mining equipment.

“Atlas Copco Ghana Limited remains committed to superior productivity in these sectors.”

He said: “Customers will now benefit from having the same supplier for drill rigs, breakers, road construction equipment as well as mobile crushers and screeners; this makes us a complete partner.

Atlas Copco is an industrial group with a world-leading position in compressors, construction and mining equipment, power tools and assembly systems.

The group delivers sustainable solutions for increased customer productivity through innovative products and service.

Founded in 1873, the company is based in Stockholm, Sweden, and has a global reach spanning more than 170 countries.

Gas: is it a priority?

Industry experts have expressed apprehension about the slow pace in developing infrastructure for the utilisation of associated gas from the Jubilee oil production, which commences this November.

Tullow Oil Chief Operations Officer Stuart Wheaton recently said: “gas from oil production in Jubilee will have to be injected back into the well until infrastructure for utilising it is ready.”

Key stakeholders opined at the recent First Domestic Content and Matchmaking Exhibition/Conference in the Oil and Gas Industry, and the 8th West African Mining and Power Conference, both held in Accra, that injecting Jubilee gas back into the well will have cost implications as well as deny the country the benefit that would have been obtained from utilising the gas to generate electricity.

Additionally, industry observers are concerned that no indications have been given as to how long the non-utilisation of Jubilee gas will last.

Their concern stems from the fact that the country needs to urgently put its gas infrastructure in place to help generate critically needed electric power – especially as it was anticipated that would be done before first oil in the last quarter of 2010 and the Ghana National Petroleum Corporation (GNPC) has imposed on itself a policy of zero-gas flaring from oil production.

GNPC intends to utilise associated gas from the Jubilee oil production to power thermal plants at Effasu and Takoradi for the generation of more than 600 megawatt of electricity to help in the country’s industrialisation as well as generating revenue by selling natural gas and derivatives to the domestic and international marketplace.

The GNPC, with a 13.5 percent stake in Jubilee, is mandated by government to utilise all associated gas from the country’s oil production and expects to take 50 percent of an expected daily production of 120 million cubic feet of natural gas from Jubilee.

State-run GNPC has the responsibility of constructing the gas processing infrastructure to off-take the Jubilee gas from a floating production storage and offloading vessel, the FPSO Kwame Nkrumah, operated by Jubilee partners.

GNPC officials have disclosed that they are in the process of developing the gas processing infrastructure, with an earmarked land at Bonyere some 62 km from the Jubilee field currently being surveyed to establish its suitability as a location for the gas processing plant.

Officials also disclosed that the process of identifying a minority partner for GNPC in the gas infrastructure project is far advanced, without giving details of firms involved and timelines for delivering various stages of the infrastructure such as offshore pipelines, the gas processing plant, and the onshore pipelines expected to connect to the thermal plants at Effasu and Aboadze in the Western Region.

Experts say such infrastructure could take up to three years to develop and bring up to full operation.

“That would be a long time to wait to realise our national dream of improving electric power generation capacity to address the debilitating power supply shortfalls and poor quality power delivery that is making local industry so uncompetitive against foreign counterparts,” an industry expert said.

Initially, Jubilee partners had proposed that Sithe Energies - which owns stakes in nine operational facilities in the US with a total generating capacity of more than 1,300 MW and which sells energy to utilities, industrial companies governments, and other institutions - develop a 240 MW onshore thermal power generation plant to utilise associated gas from the Jubilee field, by the end of 2010.

Gas utilisation and monetisation was, however, a contentious issue in the approval of the plan of development for Jubilee production. Under the Petroleum Agreement for the blocs straddled by Jubilee, operators including Tullow Oil and Kosmos Energy owned the associated gas.

Energy Minister, Oteng-Adjei, however adeptly wrung concessions from operators who agreed to give gas gratis to government under phase-one of the Jubilee developments to enable government develop its gas infrastructure; but for phase-two, they will charge market price.

In October 2009, Nigerian indigenous explorer Oando Plc was announced to partner GNPC in developing Jubilee’s gas infrastructure.
Oando, eventual winner among a shortlisted five out of an initial 50 international bidders, were to be the “lead developer” of three firms chosen to form a consortium with GNPC. The other firms were Italy’s Saipem and a Japanese consortium, Modec-Itochu.

The project, said to be worth US$1 billion, includes the development of offshore and onshore gas pipelines, processing facilities, and liquefied petroleum gas and condensate storage tanks, among other structures.
Source:

B&FT

Stanchart celebrates 114 yrs in style

Standard Chartered Bank climaxed its 114th anniversary celebration in the country last year by making history in its operations, chalking a number of firsts.

The Bank’s financial performance for last year ended with a record profit after tax of GH¢57.4 million, the highest so far in the bank’s existence in the country. This was about a 73 percent increase over the 2008 figure.

In the same year Standard Chartered Bank led a pack of consortiums to secure a syndicated facility of US$1 billion for the Ghana Cocoa Board, making the transaction the first large, structured soft commodity syndicated deal in Africa.

This pioneering performance was delivered despite the continued uncertainty in the financial sector both locally and international last year.

Again, in October last year, the Bank launched its Internet banking platform, Straight2Bank - the first of its kind on the market - which supports trade transactions and cross-border payments for its SMEs.

More impressively, the Bank reclaimed the accolade “Most Socially Responsible Bank” in Ghana at the 8th edition of the Ghana Banking Awards held last year and organised by Corporate Initiative Ghana in collaboration with the Association of Ghana Industries and the Ghana National Chamber of Commerce.

The award for Corporate Social Responsibility (CSR) is based on reviewed information obtained from banks regarding programmes they have financed aimed at improving the quality of life of their staff and the community at large.

“Our brand is all about commitment. We are here for good, to create value for our shareholders, to support and partner our clients and customers and to make a positive contribution to the broader community,” said the Chief Executive Officer of Standard Chartered Bank Ghana, Heman Shah.

Standard Chartered has shifted from Corporate Social Responsibility to the concept of sustainability – a way of doing business that is fundamental to its strategy, embedded across its businesses, and which contributes to shareholder value. The Bank has a Sustainability Agenda in place that is driven by 4 key pillars: namely Governance, Environment, Social and Economic contributions.

On its outlook, the bank wants to be very dominant in the corporate banking segment in the Ghanaian banking sector.

Mr. Shah said: “We are a not a mass market bank. This is the strategy we have adopted as a bank, and we will keep to that. We are interested in the high value segment of consumer banking.

“We want to be dominant in the corporate banking segment because we have a strong balance sheet, we have the best expertise, and we have the best products and services in that segment of the market. The combination of the skills, balance sheet, and our products and services puts us in a good position to be very competitive.”

Standard Chartered now is focused on a path of continuing to create new opportunities, diversify its portfolio and ensure it has the flexibility to anticipate and respond to challenges in the market.

“We are committed to forging an enduring partnership with the government and regulators by providing thought-leadership and market expertise.

“It is our aim to champion the development of a more modern and sophisticated financial system, leading the way as a key player in the market and demonstrating best practices in risk management, product development and financial discipline in the economy,” added the Board Chairman of the Bank, Ishmael Yamson.

Standard Chartered Ghana is listed on the Ghana Stock Exchange, is the market-leading financial services brand in the country and is presently the highest priced stock on the local bourse.

The Bank has a network of 42 ATMs, and 21 branches and corporate offices throughout the country.

Its operating income and balance sheet have doubled over the last five years; primarily as a result of its standards of service, risk management and a disciplined approach in the way it does business.

Standard Chartered Ghana aspires to be the best international bank for its customers in the country.

It is one of the leading foreign banks in terms of trading profit in the country generated from its Wholesale and Consumer Banking businesses, and continues to introduce its market-leading suite of products and services such as Straight2Bank, Direct Inter-branch Payment System, Bancassurance, the DIVA Club and various Thought-leadership programmes.

Leading by example to be the right partner for its stakeholders, Standard Chartered is committed to building a sustainable business over the long-term and is trusted in the country for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity.

Positioned as the “Great place to work”, Standard Chartered Ghana employs over 770 people from 11 nationalities and has woven a fine workplace culture-mesh which engenders trust, engagement, diversity and inclusion.

source:B&FT

Local Content Policy needs clarification

Key stakeholders have expressed concern about some critical issues that have revealed grey areas in the local content policy for the emerging oil and gas industry.

The President of the Association of Ghana Industries (AGI) Nana Owusu-Afari, addressing the closing session of the First Domestic Content and Matchmaking Exhibition/Conference in the Oil and Gas Industry, in Accra, said there was urgent need for clear definition of local content and its scope.

Government sources have hinted that a concluded draft local content policy, expected to be passed into law by Parliament soon, provides for an initial 50 percent participation by Ghanaians - in terms of staffing of companies servicing the sector as well as in the deliveries of goods and services.

The extent of local participation is subsequently expected to increase to well over 80 percent within a decade.

Nana Owusu-Afari emphasised that the AGI and other Ghanaian stakeholders expect to be included in the process leading to the development of final regulation for the policy while calling for the fine details of the Local Content Policy.

Other critical issues of concern highlighted by the conference participants include the need to have structures to monitor compliance in order to avoid Ghanaians playing only nominal roles in the oil and gas industry.

“We must prevent the usual practice of Ghanaians fronting for foreigners for a pittance as commissions, without necessarily participating in the enterprise over the long-term to reap maximum benefits,” the AGI president said.

There is also need for clear criteria as to which entities must register with the Ghana National Petroleum Corporation (GNPC), while assuring the transparency of the registration process.

Local companies interested in servicing the upstream international oil companies operating in the country are expected to first register with the national oil company, GNPC, which currently has registered over 120 companies.

The registered companies however say they are at a loss as to what to do next, since the GNPC has not given them any orientation or training with regard to engaging the oil companies for contracts.

Conference participants are also demanding timelines for the commencement of the local content policy and when the proposed oil and gas upstream sector regulator will be in place.

They also noted that some foreign companies require suppliers to meet further certification criteria. Some of the criteria, they observed, are stringent and government therefore should help build local capacity to meet such criteria.

Meanwhile, Ghanaian companies also endeavour to adopt best practices and improve their service standards in order to remain competitive by industry standards
Nana Owusu-Afari said a communiqué of the proceedings of the conference will be issued soon, and disclosed that a paper will be presented to government within a couple of weeks about the key issues raised.

The key collaborators in the conference will additionally organise training programmes as part of capacity development of local enterprises, beginning next month with MODEC - the company that owns the FPSO Kwame Nkrumah leased to the Jubilee partners for the production oil and gas, which is expected to turn the country into an oil exporter by the end of the year.

Highlights of critical issues
• Definition of scope of local content
• Need for structures to monitor compliance to avoid Ghanaians playing only nominal roles
• Criteria for entities registering with GNPC and transparency of process
• Timelines for commencement of policy and institution of a regulator
• Certification and Standards for local companies

soure:B&FT

Oil industry and matters arising…

Ghana will become one of the world’s top fifty oil producers when the country begins to pump crude oil from the Jubilee field at the tail-end of the year.
With this new-found resource, expectations are high with officials hoping the field will drive economic growth by 20 per cent in 2011 and help lift the country out of the low income bracket into the middle –income ranks of countries like Egypt.

However, an industry player, the Country Manager of Tullow Oil has reiterated that it is imperative for Ghanaians to manage their expectations reasonably. According to the official, “Ghana does not yet have an oil industry; it only has an oil field.”

As the operator of the 800 million-1.2 billion Jubilee field, we believe the advice should be taken in good faith. Jubilee is currently Tullow’s largest project and initial output from the field is expected to reach 120,000 barrels per day, rising to 150,000 barrels per day within, months and potentially peaking at 250,000 barrels per day by 2013.

The Paper believes the Tullow Oil country manager’s comment is a genuine manifestation and not unduly borne out of malice and should be appreciated as such.
Even before the first barrel is drilled, there seems to be a lot of clamouring from both traditional authorities as well as others with regards the expected revenue to be accrued from the well. The seeming over-hyped expectation has given rise to a lot of comment from both official and unofficial sources about what the oil is expected to do to the economy thereby giving rise to a lot of demands.

As the country prepares to drill for oil, at every opportunity, there are comments from well –meaning people who remind us that the resource, if not well managed, can prove to be an albatross around the neck of nations like sister oil-producing countries in the sub-region who still wallow in poverty amid the availability of the resource in abundance.

Ghana is truly blessed to discover this lifeline at this opportune moment but it will also do us a wealth of good if we just go on with our normal lives as if the oil discovery had not been announced.

This way, we would not be building our hopes so high as to merit the comment of some of the crucial players in the industry who might feel the country is making a meal out of this new-found discovery.

There is a need to feel relief from a resource which is bound to add to our dwindling foreign reserves but the caution is that it should be measured!
In a related development, the Paper is encouraged by government’s intention to introduce a policy that would ensure Ghanaians are given the opportunity to maximize the benefits from the oil find.

To this end, the western rail corridor is seriously being considered for rehabilitation to facilitate the smooth operation of the oil and gas sector. Local companies have therefore been enjoined to brace themselves up for the likely competition that would be faced from foreign companies.

The Minister of Trade and Industry who attended the just-ended three-day conference to discuss a proposed policy to promote local participation expressed the hope that the policy would help reduce the tension that usually accompanies the production of oil.

The policy, when adopted, will ensure that an operator or an agent in the petroleum sub-sector shall ensure that opportunities for employment is given to Ghanaians who have the requisite expertise.

Source: B&FT

Jubilee gas to be pumped back

Natural gas produced alongside first oil from the Jubilee field will be pumped back into the well, contrary to recent expectations of gas being exploited before oil.

Tullow Oil Chief Operations Officer Stuart Wheaton said: “Associated gas from oil production in Jubilee will have to be injected back into the well until infrastructure for utilising gas is ready.”

Oil production, expected to commence towards the end of this year, will produce the equivalent of 10 times as much in cubic feet of natural gas as daily oil output. Initial oil output is expected to be about 60,000 barrels per day (bpd), ramping to 120,000 after about six months.

In a presentation at the just-ended Ghana Oil and Gas Summit, Wheaton disclosed that eight oil producer wells, and six water and two gas injectors have been drilled with one producer well to be drilled post-first oil.

In recent times, official statements have been indicating that Ghana will exploit its Jubilee gas resources ahead of first oil, with Energy Minister Dr. Joe Oteng-Adjei reportedly affirming this on the sidelines of an international conference on oil and gas in Trinidad and Tobago.

With a zero gas-flaring policy, the country hopes to utilise all associated gas from oil exploitation in the production of electric power, mainly, as well as for domestic use and other industrial uses such as fertiliser production.

Natural gas output from Jubilee is expected to be around 1.2 million cfd, with half of that injected back into the oil reservoir to boost pressure while the remaining 600,000 cfd is channelled through a pipeline attached to the flange of the FPSO (floating processing and offloading) vessel to an onshore gas processing plant to be sited at Bonyere in the Western Region.

The installation of the FPSO is expected to begin in June after arriving from a Singaporean shipbuilding yard, but infrastructure for gas has not yet commenced.

Experts at the Ghana Oil and Gas summit said the gas infrastructure may take a little longer in being developed.

The Ghana Summit, organised by the CWC Group brought together international industry players who deliberated on how best to make Ghana’s oil industry a success story.

Experts said the country needs to focus more attention on the development of credible local content that would see Ghanaians participating more meaningfully in the emerging oil and gas industry.

Dr. Oteng-Adjei said: “The active involvement of Ghanaians in the oil and gas exploration, development, production and utilisation through local content and local participation has become a major policy issue.

"Many of our people see the oil discovery as the last opportunity for achieving the national prosperity that has eluded our nation all this while.”
Participants at the summit said a clearly defined local content is critical to the country’s nascent hydrocarbon industry if Ghana is to emerge as a successful oil economy.

The Managing Director of GNPC, Nana Asafu-Ajaye, said Ghana’s concept of resource nationalism is to get Ghanaians participating at all levels of the oil and gas industry - with the indigenes controlling about 80 percent of the resource and ultimately controlling about 90 percent.

Source: B&FT