The first of the series, which brought together seven financial institutions and local suppliers on June 4 was to help the suppliers identify and find solutions to the challenge presented by the lack of finance.
The Director of External Affairs, Social Performance and Local Content at TGL, Ms. Cynthia Lumor explained that access to finance has been identified as a major challenge facing indigenous companies in the oil industry in Ghana.
She noted that the country has been producing for almost 12 and a half years now but the oil and gas industry is still very new by any comparison.
Speaking at the seminar on “Access to Finance” for about 215 indigenous companies, she noted that looking at the different components of the industry, supplier development was a big part because when the suppliers grow, their businesses grow, jobs are created and there is more revenue for the government in terms of taxes.
She deduced that companies can have all the skills in the world, build all the capacity, but in a capital-intensive industry like theirs if they do not have access to financing, it becomes very difficult to participate in the supply chain.
She said TGL has been getting feedback that access to finance is one of the stumbling blocks for a lot of these companies and received requests from many of the banks to have access to local suppliers who need finance.
“Tullow has a shared prosperity aspiration and believes firmly that the country’s hydrocarbons must be a catalyst for growth.
Therefore, as part of the catalyst solution, we thought it necessary to bring together the two sides; those who need the financing and our seven banks to share their attractive packages with potential suppliers to our sector,” she said.
She stated the seminar was the first in a series to offer the local companies and the banks the chance to begin to network. The participating banks included Fidelity Bank, GCB Bank, Cal Bank, Standard Chartered Bank, Stanbic Bank, Barclays Bank and SG Bank Ghana.
It was to share with the local companies Tullow’s payment cycle in order to guide them when negotiating for finance, introduce the seven banks that Tullow works with to as many of the suppliers as possible and to facilitate access to attractive rates and other financing options that the banks have crafted towards their needs.
Ms. Cynthia Lumor said TGL had organised several capacity building programmes for the local companies on topics such as joint venture and permitting, closing the gaps and tender processes, in order to enlighten them how to respond to some of the tenders and not to take things for granted.
“Safety, health and regulatory requirements are big issues in the oil and gas industry and there are a lot of considerations in everything we do, but some companies miss out. So, our advice is, always respond to every question on the form and make sure you are prepared to meet the standards,” she advised.
She hoped the challenge of financing will be overcome in the journey to grow the oil and gas industry in Ghana.