Some experts in the oil and gas sector have once again expressed the need for local banks to strike partnerships to be able to raise capital to finance indigenous companies interested in participating in the upstream sector.
Meeting at the seventh Ghana summit for oil, gas and power in Accra, some of them expressed the financing needs for the upstream petroleum sector as a major impediment to local participation.
“We need a situation where banks can syndicate and be able to raise funding for local companies,” Mr Kwame Jantuah, CEO of the African Energy Consortium Ltd said.
“We need to do something about the banks, because if local companies are going to go into this field, it is not an easy thing to go into. It requires a lot of financing and local companies cannot go abroad like international oil companies can, to bring in financing.”
Mr Kwame Jantuah, who is also a commissioner at the National Development Planning Commission, said the need for syndication and merger activity in the banking industry is now more essential as Ghana ventures into onshore exploration, which is less capital intensive.
Being less capital intensive, he said the financing requirements for onshore oil exploration and the pumpjacks used in onshore production, are more within the reach of local banks, providing an opportunity for teaming.
Ghana recently issued the first onshore exploration and production license for the Keta Delta block in the Voltaian basin, to the Ghana National Petroleum Corporation (GNPC), Swiss African Oil Company Limited and PET Volta Investments Limited.
Financial analysts have often advocated syndication in the banking industry to enable local banks rise above their small balance sheets and compete for more big ticket projects to accelerate the development of infrastructure.
By Emmanuel Odonkor