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Ghana’s Oil City comes alive

DSC_0251For some time, economic activities in the twin city, Sekondi-Takoradi, the capital of the Western Region, have slackened and the traditional hustling and bustling in the good old days has diminished to a vanishing point. In fact, Sekondi became even quieter, following the construction of the by-pass from Essipon to Takoradi.

The bypass was meant to provide a quick access road for people traveling from Accra to Takoradi.

The Takoradi Port handles most of the commodities that are exported from Ghana, with some of the key export commodities being timber, cocoa, bauxite, manganese and rubber. Another event that contributed to the virtual demise of the Twin City was the cessation of the operations of trains; and more noticeably, the closure of “Location” – the foremost and acclaimed mechanical and electrical workshop that serviced the railways and the trains.

Discovery of Oil
Then came the discovery of oil in commercial quantities in June 2007, and presto, economic activities started coming alive; and the city awakened from its long slumber!  A lot of water has passed under the bridge since the Government of Ghana decided in 2008 to fast track the development of the Jubilee Field. The Jubilee Field, as fate has it, is situated only 63 kilometres south-west of Takoradi. It has been interesting and breath-taking following and watching events in the city from 2008 to date

With time, the old name of “Twin-City” gave way to the “Oil City” which may only refer to Takoradi, depending on who one speaks to. There have been spectacular events in the Oil City and one may even lose count of them.

First and foremost, the world-class oil find has ushered in an avalanche of global oil exploration and production (E&P) as well as service-provision companies into the city.

These companies include Baker Hughes, Tullow Oil, Kosmos Energy, Hess, Halliburton, Technip, Worley Parsons, Schlumberger and FMC Technologies. In fact, there are others including Shell and BP marking time in the wings, waiting for the green light to join the privileged few for a piece of the ‘black gold’.

Since June 2007, significant oil finds have been made in August 2007, February 2008 and thereafter.

Ghana appears to be so heavily endowed with the black gold that it may not be wrong to say that oil discoveries are made almost on a quarterly basis. Petroleum is second only to water as the leading consumable on earth and society is more dependent on petroleum than on any other natural resource for the comforts and conveniences of the modern world.Fuel for our transportation, lubricants for our engines, temperature control for our homes, base components for the manufacture of foodstuffs, fertilisers, medicines, plastics, building materials, and synthetic fabrics are all provided by oil and gas. From the foregoing, one can hardly imagine the huge potential and business opportunities that are bestowed on the Oil City.

First Oil
The resolve of the Government of Ghana and the Jubilee partners to fast-track the oil production was rewarded with the pouring of first oil on December 15, 2010.
This marked a significant achievement, and the chalking up of a global first, in terms of cutting-edge logistics and technological applications. This ushered Ghana into the league of oil producing nations, and gave credence to the immense oil and gas reserves of the West African hydrocarbon province, particularly in the confines of the Gulf of Guinea.

Considering the state of infrastructure in the Western Region and also in the Oil City, some of the inhabitants of the region went into overdrive mode with regard to the expectations; and rightly so, considering the fact that the black gold is perceived to transform economies overnight and provide a panacea to all problems.
Several debates have taken place and a lot of articles have been written showing apprehension due to the spectre of ‘oil curse’ or expressing joy at the oil and gas find in the country. While some of the people living in the Oil City have the hope that the production of oil will transform it, others are of the view that it may not make any difference.

Impact of Oil Production on Oil City
It cannot be gainsaid that the oil and gas find has heralded a lot of opportunities and challenges in the Western Region in general, and the Oil City in particular. A visit to the Oil City reveals that most of the E&P companies have workshops and operational offices located in the precinct of the Air Force Base and the Baker Hughes compound (formerly the Pioneer Tobacco Company Factory). These offices and workshops have a blend of local and expatriate staff offering various skills and expertise required by the emerging oil and gas industry.

The presence of these professionals has enhanced the buying power in the city, boosting the supply of goods and services. Additionally, landlords and landowners are reaping windfalls in house rentals and pricing of land, while hotels of various grades have sprung up. The negative aspect of this apparent boom is that workers in non-oil and gas sectors of the local economy have seen their standard of living eroded due to the high cost of goods and services and escalation in house rents. Comparatively, professionals and other workers of the oil and gas industry are better remunerated than their counterparts in other industries.

Economic Characteristics
The emerging oil and gas industry, which has the propensity to impact positively on the micro economy of the Oil City, possesses some prominent characteristics. Among these are huge capital investments, unitary risk profile and the dynamics of supply and demand.

Globally, the increasing dependence on petroleum is motivating industry leaders to find better ways to secure, process, and deliver petroleum products; while maximising margins, minimising waste, and improving overall corporate profitability within the constraints set by prevailing societal and environmental pressures. It is therefore incumbent on the inhabitants of the Oil City to be more creative and innovative in supplying goods and services required by the oil and gas industry.

It is still too early to assess the full impact of oil and gas on the Oil City. However, there are few adverse impacts. The heavy vehicular motion due to the transportation of plant and equipment, mainly from the port to the offices and workshops of the oil companies, has exacted heavy toll on the roads.

A case in point is the Axim road, which has lately taken a heavy beating. Also, there is a lot of damage to the Anaji to Fijai road. One significant impact of the oil and gas find is the traffic congestion on the city roads, particularly during peak hours.
The busier roads are the Ketan to Takoradi stretch of the Essipon to Takoradi bypass, the Axim Road, the Market Circle, the Kwame Nkrumah Roundabout to the Market Circle and the Effia Nkwanta to Paa Grant Roundabout.
As more oil and gas finds are made in future, more E&P companies will establish workshops and offices in the Oil City and contribute to the congestion on the roads. On the positive side, they will enhance the micro economy through increased demand for goods and services, including providing employment for the restive youth.
Another impact of the industry is the increase in sex trade, incidences of armed robbery and influx of young men from various regions in Ghana and also from neighbouring countries; crowding out the job avenues.

Business Opportunities
The decision by the government to add value to the associated gas of the Jubilee field is both laudable and strategically important. However, Ghana needs to delineate specific geographical areas as growth and development nodes for spatial development initiatives (SDIs). The promotion of sustainable development, which is the ‘in-thing’ in contemporary times, could be fast-tracked by the government through the use of SDIs. The areas that have comparatively high incidences of poverty and unemployment could benefit from the concept of SDIs.

The sheer hunger and the determination for improvement in such areas could serve as a catalyst for sustained growth. The headship of the region and various hues of leadership in the Oil City – political, business, traditional, and religious – could take advantage of the concept of SDI and create few in the region, in the Oil City and in its peri-urban areas.

The SDIs may be organised into local and industrial development zones (IDZs), as well as second-tier types for operability and easy manipulation. In addition to the growth nodes that could provide anchor projects, it is prudent to establish a vibrant gas market; on account of the ongoing construction, a gas processing plant at Atuabo, a coastal town in the region. Before an SDI is established, the market dynamics that affect the natural gas value chain need to be properly evaluated and prudently managed to avoid failure of the chain.

Source: Joe Asamoah/Daily Graphic

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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