Industry skills gap, gas flaring impede West Africa competitiveness

West Africa countries like Nigeria, Ghana, Cote D’ivorie with their combined years of engagement in commercial production of gas have continue to struggle with issues around shortfall of required industry skills and gas flaring.

Attracting appropriate skills and its resultant wage bill remain the biggest challenge confronting the gas industry. The most difficult vacancies to fill in the industry in a country like Ghana are drillers, engineers, mangers, production and operation workers.

The main causes of the skills shortages in Ghana could be attributable to the immaturity of the industry, and insufficient capacity building in the acute areas. Also, demand for skilled labour exceeds the supply, insufficient skilled applicants, competition for labour among the oil companies and high cost of labour.

Aside the skills shortfall concerns, industry experts opine that gas flaring in West Africa gas sectors pose significant challenge that needs to be addressed.

Close industry watchers observe that Gas flaring among other things affect the environment and human health, produces economic loss, deprives the government of tax revenues and trade opportunities, and deprives consumers of a clean and cheaper energy source.

Gas flaring has negative impact on the economics of the nation in terms of loss of funds and revenue. Report from Nigerian National Petroleum Corporation (NNPC) indicates that in 2016 Nigeria lost N217bn to gas flaring; in Ghana there is an estimated loss of 1.2 million daily in revenue for either flaring the gas or delay in utilising the associated natural gas by the Ghana Gas Company.

Giving the zero gas flaring policy by Ghana National Petroleum Corporation (GNPC), the need to monetize this associated gas became imperative. Hence, the establishment of Ghana National Gas Company at Atuabo to harness the potential of the associated gas to be utilised as domestic usages and industrial purposes.

In Nigeria, the ministry of petroleum resources through the minister for State for petroleum, Ibe Kachikwu was quoted to have said that under the gas policy, the government intends to maximise utilisation of associated gas to be treated for supply to industries.

“To ensure that flared gas is put to use in markets, the government will take measures to ensure that flare-capture and utilisation projects are developed and will work collaboratively with industry, development partners, providers of flare-capture technologies and third party investors to this end,” he was quoted to have said.

According to the gas policy, the current gas flare penalty of N10 per 1,000 scf of associated gas flared is too low, having been eroded in value over time, and is not acting as intended, as a disincentive.

“Consequently, the low penalty has made gas flaring a much cheaper option for operators compared to the alternatives of marketing or re-injection. The intention of government is to increase the gas flaring penalty to an appropriate level sufficient to de-incentivise the practice of gas flaring, whilst introducing other measures to encourage efficient gas utilisation,” it added.

It is the expectation of industry experts that collaborative efforts with right investment climate, government policies, appropriate capacity building and other proactive measures are needed to surmount the obstacles if the industry would continue to play significant role in the West Africa’s economy.

KELECHI EWUZIE