Energy Chamber’s Foray Into Africa

By THACKWRAY DRIVER, Chief Executive Officer, Energy Chamber of T&T

Beginnings

Flashback to 2008: Great things were expected after this meeting between former president of Ghana, John Agyekum Kufuor, left, and then prime minister Patrick Manning.
The Energy Chamber’s involvement in promoting trade between Trinidad & Tobago and various countries in Africa began in earnest in July 2008, with a visit from an Economic Community of West African States (ECOWAS) delegation to Port of Spain. At the meeting members of the Trinidad & Tobago private-sector presented their companies and the energy services that they offered. This resulted in significant interest from the delegates from ECOWAS: specifically they saw in the Trinidad & Tobago private-sector companies exactly the sort of private enterprise they wanted to see developed in their countries to ensure that the oil and gas sector spurred wider economic development.
The very encouraging and open response from the ECOWAS delegation, headed by Dr. Mohammed Ibn Chambas, President of the ECOWAS Commission, gave Trinidad & Tobago companies the assurance and confidence to make a more deliberate step into the African market, in particular into West Africa.
Prior to 2008 there had been many discussions about the potential of the African market – especially through the annual Emancipation Support Committee Trans-Atlantic Trade and Investment Symposium—and a number of pioneering individuals and companies who had made some initial forays, but there was little organised private-sector activity. Now there seemed the possibility of a more organised and deliberate approach and the Energy Chamber took a decision to fully explore the possibility of exporting energy services to African countries.

African Energy Initiative
The ECOWAS meeting took place as part of the African Energy Initiative announced by then prime minister Patrick Manning in January 2007. The African Energy Initiative was conceptualised as a Government to Government activity, with Trinidadian technocrats offering advice to African Governments on how to develop their oil and gas industries. This resulted in a number of official exchange visits back and forth between Trinidad & Tobago and various African countries, mainly consisting of Government officials. These visits culminated in a summit of African Energy Ministers in Port of Spain in May 2009. By this stage the Energy Chamber was already well advanced in organising a trade mission to Nigeria and Ghana and the fact that most of the delegations were also accompanied by private-sector representatives meant that we were able to make some strong and direct linkages with private sector representatives.

Exporting Energy Services
During 2007 and 2008 the Energy Chamber had begun to more seriously explore the possibilities of the more systematic and deliberate export of energy services from Trinidad & Tobago. With the ending of a number of major exploration drilling campaigns and the slow-down in upstream drilling activity in mid-2008 it was clear to people involved in the upstream services sector that they needed to find opportunities for the skilled workers and their equipment outside of Trinidad & Tobago. For the major international service companies operating in Trinidad & Tobago this was not a serious problem and they quickly reassigned their Trinidad & Tobago staff to the hot-spots in the global energy industry where they already had activity, such as Angola, Australia and Brazil. For local companies, however, this was not such an easy undertaking. With no work in Trinidad they needed to find new opportunities if they were to hold on to their resources and keep their companies afloat.
Employment in the upstream energy services sector dropped by about fifty percent from mid 2008 to mid 2009, with many people moving out of Trinidad to take up new opportunities and others taking up opportunities in the down and mid-stream construction sector, where major activity continued through 2009 and into 2010. It is testimony to the enclave nature of the energy sector that this shift in employment seemed to hardly be noticed outside of the sector.
Members of the Chamber began to call more seriously on the Chamber to help them access new opportunities outside of the country. Initially the Energy Chamber looked to the region, in particular to Suriname and Guyana, where the CARICOM Single Market allowed easy access, but also to Cuba, which seemed to offer some interesting opportunities. We embarked on Trade Missions to all of these destinations. Suriname in particular has proved to be an important market for services companies during the last few lean years; Guyana has yet to really take off and, while there are significant opportunities in Cuba, administrative delays have hampered companies in grasping the opportunities.

West Africa 2009
With the heightened interest created by the African Energy Initiative, the linkages made with African Governments and the private-sector, and the encouragement of a few pioneers such as Ken Ferguson and Eric Williams, the Energy Chamber embarked on its first African Energy Services mission to Nigeria and Ghana in October 2009.
A delegation of nine member companies, headed by the CEO of the Energy Chamber, spent a week in each country and made numerous very fruitful linkages and identified many business opportunities. We were warmly welcomed by our main private sector partners, the Port Harcourt Chamber and the Petroleum Club in Nigeria and by the Association of Ghana Industries in Ghana. The Trade Mission was accompanied by the Trinidad & Tobago High Commissioner in Abuja, Her Excellency Victoria Mendes Charles and her presence was extremely important in opening many official doors and ensuring that we were given a warm welcome wherever we went. Mr Hilton John Mitchell, the Honorary Counsel from T&T to Ghana organised the trip and helped make many important links in both Government and the private-sector.
The opportunities in Nigeria were numerous, large and immediately obvious, though it was clear that doing business in Nigeria involved some unique challenges (the traffic in Lagos alone was mind-boggling). The main benefit of the visit was to open the eyes of T&T businesses to the possibilities of the Nigeria market and even more importantly to ensure that they were able to meet with potential business partners. Ghana on the other hand did not offer the same scale of immediate opportunities, but it was also clearly a much easier place to do business.

Building on the linkages
Coming on the heels of the visit to West Africa, the Commonwealth Business Forum in November 2009 allowed the Energy Chamber to deepen its linkages. We were able to return some of the hospitality shown to us and we were able to host representatives from the Petroleum Club in Lagos back in Trinidad and to show them something of the island and our energy industry, including trips to San Fernando (via the Water Taxi), La Brea and Point Lisas.
Linkages with Ghana also quickly grew and by the time of the February 2010 Energy Conference, the Chamber was able to secure not just the involvement of the Honourable Minister of Energy from Ghana, but also Nana Kobina Nketsia, the traditional leader of the Sekondi region in Western Ghana. Both gentlemen spoke eloquently and passionately about the potential linkages between Trinidad & Tobago and Ghana and the potential that these linkages had for the development of both countries.

East Africa 2010
With the success of the West African trip under our belt, the Energy Chamber took up a challenge from His Excellency Patrick Edwards, the Trinidad & Tobago High Commissioner to Uganda, to follow-up with a visit to East Africa. In July and August 2010, eight representatives of member companies and two representatives of the Energy Chamber undertook a three-week mission starting in Uganda and followed by visits to Tanzania, Rwanda and Kenya. Again we were accompanied throughout the visit by the hard-working High Commissioner and again this ensured many official doors were opened to us.
The most immediate business opportunities were evident in Uganda, with its significant new oil finds and the logistical challenges involved in developing oil in a land-locked country with poor transport linkages. Tanzania also offered significant potential business opportunities, given the large gas finds projected for its off-shore acreage, and its limited existing technical expertise. Rwanda’s evident passion for private-sector investment also presented some interesting, if less traditional, opportunities, while the strong domestic private-sector in Kenya provided some good potential business partners.

The Ghana Initiative
During late 2009 and early 2010, the Government of Trinidad & Tobago’s African Energy Initiative underwent a significant shift, moving from a general provision of technical assistance to the aggressive development of a specific investment opportunity in the Ghanaian gas industry, led by the National Gas Company, with technical support from Phoenix Park Gas Processors. The change in Government in Trinidad & Tobago in May 2010 led to a six month hiatus in pursuing this investment, but with the advent of a new NGC Board the project was again pursued aggressively.

Return to Ghana 2011
To the Trinidad & Tobago private-sector this seemed an excellent opportunity to get a strong toe-hold in West Africa. It was anticipated that Trinidadian companies would have a distinct advantage in working with the NGC in the development of any projects, and the relationship between the NGC and the Ghana National Petroleum Corporation (GNPC) was seen as offering an excellent opening for Trinidad businesses to make fruitful links with potential partners in the Ghana private-sector. With this in mind and with the news that the finalisation of the NGC/GNPC development was imminent, the Energy Chamber set-off with a follow-up eight-company Trade Mission to Ghana in April 2011.

As it turned-out the NGC/GNPC was not as final as it had first appeared and up until the time of writing the exact status of the project remains unclear. Nevertheless, numerous fruitful business relationships were established and even if the NGC project does not come to pass as originally conceptualised there are many opportunities in Ghana for Trinidadian companies.

Some conclusions and
recommendations
With three years hind-sight into the Energy Chamber’s engagement in the African energy sector it is possible to see some clear patterns and possible opportunities. The first and most obvious point is that there is huge potential for Trinidadian companies in both West and East Africa. The second obvious point is that it is going to take considerable effort and resources to turn this potential into actual business. Some of the member companies who have taken part have managed to secure contracts to work in various African countries, but others are still in the process of developing business relationships and bidding on work.
Unlike Suriname, where a wide range of Trinidadian companies have found opportunities and moved many technical staff and equipment, jobs in Africa are still one-off and on a project by project basis. The major exception to this is Kenson, who have established more permanent operations in Uganda, namely a training facility. Africa has not yet provided a significant source of business for the Trinidad & Tobago energy services sector.
Government support has been important for opening doors and making contacts, but if the foray into Africa is to be sustainable and to provide a more sustainable source of business, there needs to be a more strategic and organised approach. Much currently relies upon one or two committed individuals, rather than a well organised support system (as exists in Cuba through the Ministry of Trade’s “Trade Facilitation Office” for example). The Energy Chamber has often had difficulty in getting concerted action on the export of services, given the fact that there is a lack of a clarity about the Government Ministry with responsibility in this area (with the Ministries of Trade, Energy and Foreign Affairs all playing crucial roles).
If Trinidad & Tobago is to really implement the technical assistance promised through the African Energy Initiative, we will need to set-up and staff some institutions with authority and resources. Bi-lateral technical assistance programmes from developed countries typically operate in a manner to assist home-country consultants find opportunities in new export markets (USAID employs US consultants, DFID employs UK consultants etc. etc.). A properly structured African Energy Initiative could help T&T energy service companies and consultants access African markets.
Developed countries also typically offer scholarships to the brightest and best students from developing countries: this not only ensures a steady supply of talent but also creates binding ties between the respective national elites. A focused scholarship programme for young technocrats in African Energy Ministries and State-owned oil and gas companies to UTT or UWI could pay serious long-term dividends.
Trinidad & Tobago is a tiny player on the global energy stage, but we have developed a strong reputation for technical excellence. All players in the Trinidad & Tobago energy sector need to work together to translate this brand into genuine business opportunities. If we do so the African Energy Initiative could help to significantly diversify our exports. If not, it will be another good idea gone to waste.

Leave a Reply