Rahul Dhir, CEO, Tullow Oil: Interview

Interview: Rahul Dhir

Which factors contribute to Ghana’s attractiveness for investment in oil and gas, and how have global developments impacted this space?

RAHUL DHIR: There are a number of factors that make Ghana attractive, including political stability, an educated pool of human resources, high-quality oil, and a location that is advantageous for exporting to Europe and the US. The general economic environment is good for business and the country has a lot of opportunities in the oil and gas sector. A favourable economic environment and an abundance of natural resources are the foundations for attracting investment in any country, but a key factor for significant investment is consistency and transparency in the regulatory framework. Additional improvements in this area will further boost Ghana’s competitiveness for foreign investment.

There has been significant price volatility in commodities throughout 2020 and 2021, including for oil and gas, making it more difficult to allocate investment to exploration and production. The ongoing Covid-19 pandemic and other global developments have driven prices higher, and these are likely to remain elevated for an extended period. Despite how elevated prices contribute to a positive environment for new oil and gas investment, the risk created by the global push to reduce reliance on hydrocarbons in the energy mix puts downwards pressure on this trend.

To what extent is Ghana’s oil and gas infrastructure able to support growth targets?

DHIR: Historically the development of oil and gas resources in Ghana has been approached separately, with more focus placed on offshore oil exploration and production. One area of potential is natural gas, which can be exploited at separate fields. The resource can also be produced from associated gas at working oil fields that have this potential, as is the case at the Jubilee and TEN fields. Deepwater fields like these use floating production storage and offloading vessels.

However, additional infrastructure is required to develop associated gas resources. Ghana has strong oil infrastructure in place, but boosting its gas potential will require further investment in infrastructure – especially downstream in the processing and distribution network. Taking these steps would create additional opportunities for investment and provide consistent access to power for many Ghanaians. Moreover, developing this resource would be an asset in part due to the role that natural gas will play in the transition to a more sustainable energy mix and in driving down emissions.

How is the growing concern around sustainability impacting the strategy of the petroleum sector?

DHIR: The question of environmental sustainability is a pressing one for the industry and one that we are well aware of. As a company we have committed to net-zero operations by 2030 on our Scope 1 and Scope 2 emissions. We will do this by ending routine flaring, reducing our emissions, and offsetting our hard-to-abate and residual emissions through projects in the countries in which we work, including Ghana. Our view, however, is that as we approach the energy transition, developing economies must be able to progress without being unduly constrained by the historically harmful actions of more developed economies, which got to where they are without any regard to the environment.

The gas crisis in Europe in early 2022 has clearly shown that hydrocarbons will remain a substantial part of the energy mix as demand continues to increase, yet a number of steps can be taken to improve sustainability within the industry and reduce the carbon footprint. These include, but are not limited to, ending flaring and transitioning to the use of renewable energy for power needs. The industry can make further progress on sustainability through a collaborative approach to investment with current and potential partners, and by working closely with governments as they pursue their own national environmental goals.