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Tackling the Oil Business

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He has proved his mettle and he feels his fellow countrymen and women need to snap out of the defeatist mentality and refuse to be browbeaten into accepting they do not have what it takes to handle contracts in the oil and gas industry.

“What is it that we cannot do? Seaweld is a Ghanaian company. Now if they give me any job, no matter what kind of job it is, I will recruit expertise; he can be a foreign national but he will come in and work for me whilst he is being understudied by Ghanaians. So I can’t understand when they say local companies cannot do it,” said Alfred Fafali Adagbedu, the man who has saved the name Seaweld, a UK-brand, from extinction.

Alfred Fafali Adagbedu was working for Seaweld UK in Equatorial Guinea as a Maintenance Manager on Oil Rigs and FPSOs when Ghana discovered oil in 2007. He immediately suggested his employers should consider expanding to Ghana. But they were not interested: Ghana’s oil find was negligible and of little interest to them.

Seeing an opportunity to return home and replicate the successes he had chalked-up abroad, stiff-necked Fafali took a franchise agreement from his employers that allowed him to use the name Seaweld to set up his own company in Ghana.

Fortuitously, as it turned out, Seaweld UK went down and its former employee is on his way to buying out the franchiser by the middle of 2015.

“So, basically, Seaweld has become the one we have formed in Ghana and the branches we have opened in other countries,” he told the B&FT in an interview.

And since its establishment in 2008, Seaweld Engineering Ghana Limited has been making the waves so far as the delivery of local content in the oil and gas industry is concerned. The company is providing welding and fabrication, rig labour, scaffolding and other services to the upstream industry.

But its flagship contract has been the fabrication of component parts for the country’s second Floating Production, Storage and Offload (FPSO) vessel, currently under construction in Singapore as part of the TEN Oilfield project. Seaweld Engineering fabricated over 250 tonnes of steel work as a sub-contractor to MODEC under the project.

The contract, Fafali Adagbedu said, was not given to his company on a silver platter: “We bid on international competitive basis and won it, and this job was done by Ghanaians”.

Challenges for local companies

He therefore believes that for the country to realise its local content objectives fully, there must be a “schoolmaster” who will “whip companies into line” in adhering to the local content plans they are mandated to have.

“They always say ‘experience’: we are just starting and how do we gain the experience if we are not given the opportunity? Our major contractors are looking for what is not available. They are setting standards that are unattainable. So right from the word go, they debar you from the competition. So if the regulators enforce that once there is capacity in Ghana jobs cannot be taken out, the companies will comply. If locals are given jobs we train locals. If foreigners are given jobs they bring their foreigners.”

Lack of funding, he believes, is another major challenge Ghanaians seeking to make inroads into the oil and gas industry are faced with. The government, he reckons, could set up a fund to reinforce the banks to support local companies which have been prequalified and awarded contracts.

“The jobs you are tendering for are also being tendered for by international companies which are borrowing at 4% and 6% interest rates, while as a local company you have to borrow at 26% to 30%. You have got to offer a collateral for it and they have just to offer a contract for it. So you see how difficult it is for us.”

According to government, between 2008 and the first quarter of 2014 contracts worth a total of US$584,221,448 were awarded to Ghanaian companies in the Oil and Gas industry, a figure it said represents a significant improvement in the sum of contracts going to Ghanaian companies.

The government further indicates that there are currently about 152 Ghanaian companies, out of 232 companies registered with the Petroleum Commission, providing direct and indirect services to the upstream industry. Services provided range from catering/hospitality services, logistics supplies and freight forwarding, to fabrication and waste management services.

Source: B&FT

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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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