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Scottish firms target Ghana’s oil

  • SOURCE: | qwesa2big
  • The Scottish Government is expected to set up an office in the country by the end of the year for its investment promotion arm, Scottish Development International (SDI), to promote the interest of Scottish firms that want to invest in the country particularly in the oil and gas sector.

    Already, a Scottish firm Tullow Oil is deeply involved in the production of oil in the Jubilee Field and a lot more are coming for Ghana’s oil and related services, demonstrating foreign investors’ continued interest in the attractiveness of the country’s petroleum sector.

    SDI Regional Director for Southern Europe, Middle East and Africa, Mackay Smith explained to the B&FT in an interview that most Scottish businesses are drawn to the country’s oil and gas sector as a result of Scotland’s experience and expertise in oil and gas exploration and production, which spanned more than four decades.

    He said the Ghana Government’s recent decision to grant Tullow approval for development of the Tweneboa-Enyenra-Ntomme Development (‘the TEN Project’), and the country’s business operating environment has gingered-up the interest of Scottish firms to invest in the country.

    “What we can see is that with the new licence granted by Government to Tullow for the TEN fields, it is simply going to create more interest for companies in Scotland and for companies in the supply chain based in Aberdeen.

    “Ghana is politically stable and most of the companies at the moment are interested because of the oil and gas. The Scottish expertise is really in the sub-sea, so there are very good experts in what is required in Ghana but also in other areas like supply chain management.

    “So there is a good fit with the skill-sets that Ghana needs and what Scotland can offer. But I think the companies see Ghana as a safe market in the West-Africa sub-region and there is stability and rule of law as well as the English language, which makes it easier for companies to enter and do business.

    “In terms of oil and gas, Ghana is small compared to say Nigeria or Angola, but the companies are looking at Ghana as a regional hub where they can fly to other countries easily,” he said.

    As of now, Africa remains the second-most important market for Scottish companies after USA, with exports valued at about £1.1 billion.
    Currently, total exports from Scotland are around £24 billion pounds, which is expected to shoot up by about half over the next four years.

    Mr. Smith said the Scottish Government’s decision to set up an office in Accra forms part of its the target to boost exports by about half, driven mostly by opportunities in new and emerging markets — a target that also fits well into most Scottish businesses’ plan to explore other business opportunities in the West-African sub-region using Ghana as a launch-pad.

    “The offices worldwide are to help increase exports from Scotland; we have planned to increase the number of offices from the current 23 to over 30, and we will be opening an office in Ghana within the next six to nine months. That is our target. We will be based within the UK embassy, but we will open an office.

    “This is because we see an increase in the number of companies that are interested in investing in Africa in general and in particular West-Africa. We see Ghana as an excellent regional hub for a number of these companies.

    “The sectors that most companies are showing interest in is obviously the oil and gas. But also education companies that provide training in oil and gas as well as some other sectors, such as food and drink and some construction and IT companies that are looking at West-Africa.

    “So, one of the things that I am really working on now is to open the office in Ghana, which we see as the West-Africa office, to be able to meet demand from the Scottish companies.

    “Over the year there have always been Scottish companies in Africa helping to develop the oil and gas industry  whether in Nigeria or Angola or wherever.

    “So it is quite natural for the companies to say ‘Ghana has discovered oil so let’s also move and work in that market in addition to working Uganda, Angola, Nigeria and other countries that have discovered oil’.

    “The point that I am making is that the companies will not necessarily go to Ghana just for Ghana. Some companies might do that because there will be enough business for them. But a lot of them will go with an idea that it is not just Ghana they are working in but also other African countries,” he said.

    A report released last month by SDI said Ghana in particular has been a profitable investment opportunity and trading partner for Scotland, as Scottish trade in the oil and gas service/supply sector with the country totalled £42 million in 2012.

    This figure is partly due to the operation by Scotland’s Tullow Group of Ghana’s Jubilee Field, where current oil production stands at 110 thousand barrels per day. It is hoped this trade figure will increase given the announcement at Tullow Group’s recent shareholders’ meeting of their US$669million investment in corporate social responsibility programmes in 2012, which will improve local expertise and education.

    Other figures made available by Scottish Development International support this appetite for Scottish investment in Africa. During the last 12 months, Scottish Development International helped more Scottish companies than ever to target African markets.

    A total of 126 companies, mostly from the energy and further and higher education sectors, were assisted last year — an increase of 35 (38%) on 2011. In addition, the number of African countries that received these exports has increased in the last year from 14 to 26 different states, further demonstrating this desire to invest in Africa.

    Source: B&FT

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