Government’s vision of making Ghana a petroleum hub in the sub-region, will require over US$50 billion in investments, Energy Minister, Boakye Agyarko has revealed.
This will be needed to build the relevant infrastructure from public and private sources.
Agyarko made this known at the second edition of the Ghana International Petroleum Conference in Accra.
He said government is required to raise 10 percent of this investment to provide basic public infrastructure like road network, electricity and water, among other amenities needed at the hub.
“Obviously, the bulk of the investment required is going to be Foreign Direct Investment (FDI) but we will need to strike a fine balance between FDIs and local participation to ensure that there is significant value retention in the country,” he said.
To this end, Agyarko stated that petroleum service providers should ensure upgrading their skills and businesses to play a part in this venture.
“We [therefore] need to carefully consider the strategies and the enabling environment needed to attract such investments for the project.”
He noted that there are various options under consideration including public-private partnerships for the provision of the needed basic infrastructure at the hub.
He mentioned that financing for new refineries has become difficult to obtain since some existing refineries across the world are being shut down due to low margins.
However, Agyarko believes that with the right strategy and value proposition coupled with the right environment, investors will choose Ghana and partner with the country to develop infrastructure such as refineries, tank farms, pipelines, marine facilities for expanding its export capability and other allied facilities required to make the hub vision a reality.
“We know that Investors are mainly attracted by strong economic fundamentals in the host country and look out for indicators such as political and macroeconomic stability, level of skills, and availability of basic infrastructure and trade policies.”
Agyarko pointed out that government will provide different forms of incentives including fiscal measures to attract the needed investments.
“With these incentives and the strategic location of our country especially in the sub-region, we are optimistic that our hub will compete favourably with other trading centres across the world.”
In recent times, government’s plans to build a new refinery at Takoradi while converting the nation’s 45,000 boed capacity Tema Oil Refinery (TOR) – which currently operates at half capacity – into a tank farm has been met with mixed reactions.
A section of industry players say scrapping TOR will deny the country of the use of its 14,000 (barrel per stream day) bpsd Residual Fluid Catalytic Cracker (RFCC) which is still in good condition.
By Joshua W. Amlanu