Ghana National Petroleum has 15% ownership of the Deepwater Tano Contract Area. The other 85% of the ownership went to Tullow (47%), Kosmos Energy (17%), Anadarko Petroleum (17%), Sabre Oil & Gas Holdings Ltd, a wholly owned subsidiary of Petro SA (4%) (percentages are approximate).
In contrast, Sonangal holds 41% of the Mafumeira Sul project in Angola (Chevron holds 39%, Total holds 10 percent, and ENI holds 10%), and NNPC holds 40% of the Escravos project in Nigeria (Chevron holds 60%).
How can Chad, Côte d’Ivoire, Liberia, Mauritania, Cameroon, Niger, Gabon, Namibia, Sierra Leone, and Equatorial Guinea get a higher percentage ownership of projects in their own backyard? Low equity figures imply that partners are contributing 85% of the value, and by extension that the locals are only remunerated for their natural resource.
These countries can change the game by increasing their local supply chain competence upward toward a target of 50% of the value of the projects – more than the Nigerian and Angolan equity in the aforementioned deals, and just under the minimum target that Nigeria has set for the ensemble of sub-industries in its oil and gas sector (the minimum local content is 54%, on average).
The key to earning more equity is to accelerate the development of local capabilities that are: 1) critical to project execution; 2) that can be incrementally more profitable than the average oil and gas supply industry; and 3) that can meet oil companies’ qualification criteria within a relatively short investment timeframe.
Generally speaking, they can achieve most of these objectives by developing the following six industries:
- Pressure vessel fabrication
- Pipe fabricating and installation
- Compressor manufacture, assembly, and maintenance
- Well and drilling services
- Pump and valve assembly and light manufacturing
- Water treatment equipment and services
Boston Strategies International offers hands-on capabilities to help establish the needed capabilities in oilfield applications of each of these industries. Click here to ask us for our relevant qualifications in:
- Formation of alliances with leading technology partners
- Design and construction of facilities
- Training and development of local labor force
- Management and supervision of operations
Note: Image courtesy of AHFRO.