Lorin Boyd, Managing Director, Baker Hughes Ghana
Edited transcript
David’s Introduction: My guest today is the Managing Director in Ghana of one of the world’s leading oil fields service companies, Baker Hughes. Lorin Boyd says Ghana has great challenges ahead and must be prepared in order to gain maximum benefit from the oil industry.
David: Lorin, you have been in Ghana for a while now and you have been watching what’s going on. You are also an active participant as a major sub-contractor in Ghana’s oil industry. What is your assessment of things so far?
Lorin Boyd: We are very pleased to be here in Ghana. It’s an enormous opportunity for the nation and one of the things we are most proud of is our association with the national oil company, GNPC. I believe that GNPC is very engaging and I look forward to getting a better understanding of how they intend to shepherd the resource so that Baker Hughes can play a major role in bringing prosperity and the project to fruition.
David: What exactly does Baker Hughes do as sub-contractor?
Lorin Boyd: Baker Hughes is involved in drilling, evaluation, completion and production of oil and gas wells. Now to the layman that may sound easy, but what it is is a very involved process with very sophisticated instruments and machines. Baker Hughes is one of the leaders in directional drilling and formation evaluation. These are two key elements to successful development of oil and gas anywhere in the world.
David: You have a lot of experience in this business, having worked in so many different countries across the world? What is your assessment of Ghana’s resource?
Lorin Boyd: The reservoirs at Jubilee are very prolific and they are world class. The production indices are very promising. The first few wells that have been drilled and flow-tested are very promising. The fields should be brought on line within the coming year and would be a very successful operation for GNPC and its partners.
David: There are many people in Ghana especially Ghanaians now who tend to feel that the industry as it stands will only provide opportunities for expatriate companies like yours. What is your reaction to that sort of thing?
Lorin Boyd: Well, there is a beginning, a middle and end to just about everything. In the beginning, the skills set, the relevant experiences do not currently exist in Ghana. There are very few people who are trained and educated in the oil field services. So in the beginning there will be a lot of expatriate talent required but it’s the same everywhere. In the early 1970s when oil was discovered off-shore in the UK, it was expatriates that came in and transferred the knowledge and the same thing happened in Norway.
David: So it’s not unusual?
Lorin Boyd: No, it’s not unusual at all. In fact, it’s required.
David: Is it reasonable to assume that Ghanaians will be in the senior positions in the next decade or so?
Lorin Boyd: I would think so David. One of the things I think is extremely important is the way that the government and GNPC are steering the industry. GNPC hold local content and transfer of knowledge at a very high level in their expectation of all expatriate companies. So Baker Hughes is committed to knowledge transfer and training. It makes business sense for one thing. Another thing is, this is not our resource. This resource is for the people of Ghana. We don’t want to make jobs on the periphery, we want to explore and develop jobs in the industry for Ghanaians to prosper.
David: Which means ultimately that you will work yourselves out of a job?
Lorin Boyd: I hope to work myself out of a job in about 3 or 4 years.
David: How does Ghana compare to other parts of the world where Baker Hughes is working in oil and gas?
Lorin Boyd: Baker Hughes works in over 90 countries world wide. We have over a hundred different nationalities in our work force of some 36,000. Obviously we’ve had successes and disappointment in some parts of the world, but particularly in Africa, we’ve had a number of some shining examples of working closely with government, national oil companies and raising the expertise - very consciously - in training and transferring skills. In Ghana, I’m very excited; the level of education in Ghana is extra-ordinary and the candidates we’ve brought on board thus far are very well educated, very articulate, very hungry to get started.
We have I believe 20 engineers we’ve hired so far and they are all currently spread around the world engaged in training in specific skill sets to bring to bear back on the development at Jubilee and in the industry in a broader sense. We are currently interviewing for 12 more engineering candidates and this covers the spectrum – its petroleum engineering, mechanical engineering, and chemical engineering. We also have sophisticated equipments that require electrical engineers, so we are very bullish and very engaged with universities and polytechnics, to fast track if you will.
We are working with the University of Ghana at Legon, we are working with Regent University, and we plan to get closer ties with the Kwame Nkrumah University of Science and Technology. We are also trying to develop a much broader scope of engagement with polytechnics. Not all the positions in the oil industry will require 4-year degrees or specific math training or anything like that. A lot of this would be senior level technicians that go off-shore, run the equipment, implement and install the well hook-ups; so there is a lot of opportunity.
David: When you talk about off-shore operations what kinds of people are there, what skills are required and what are they doing?
Lorin Boyd: The rig off-shore just now, the Eric-Raude is an offshore city and there are probably 200 people on board now and at any given moment. There are engineers, electricians, communications experts, rough-necks -people that actually work the heavy machinery that drill the well. These are all positions that Ghanaians can take up with preparation, with training, and given enough coaching and focus, this could take place in a very short period of time.
David: You mentioned preparation. It’s one of those areas that I know you are quite passionate about. And sometimes it‘s almost like you have a caution when you say Ghana must prepare itself. What do you mean when you talk about preparation?
Lorin Boyd: One of the things I think we must be careful about is managing the understanding of the industry and managing the expectations of the people who want to be involved in the industry. I started about 35 years ago working on a drilling rig and opportunities and challenges presented themselves and I was able to move forward. The same thing holds true here. There are entry level positions and once a person finds his aptitude or inclination toward a specific skill set in the industry expatriate companies will go the distance to help develop those skills and those aspirations. Math and engineering is very important but workmanship standards, safety consciousness, teamwork - these are all very important elements for a successful career in the oil and gas industry.
David: As I understand it safety especially is important? Is this really just because the operation is offshore or is it the nature of the work?
Lorin Boyd: It’s the nature of the work. It really doesn’t matter if it’s offshore or not but offshore of course does present some particular challenges because you can’t get off the rig and evacuate; you‘ll have to get into a boat or something like that. One of the issues on safety is that our industry has lagged behind some others and it’s been in the last 15 years that we’ve paid particular attention to root-cause analysis, job safety standards, and job safety assessments so that our colleagues are prepared, educated and understand the risks. We just want everybody to go home safe to their families.
David: You are in an industry that does not have the greatest of reputations. Loads of people often refer to the discovery of oil as a curse rather than a blessing. How can Ghana’s experience be different?
Lorin Boyd: When I read the constitution and petroleum law, it’s clear that the resource belongs to the Ghanaian people and it’s the President’s obligation to shepherd that resource on behalf of the nation. Again with the early engagement and the vision at GNPC and people like Thomas Manu, Andrew Badu, and Francis Ackah - these gentlemen are geared specifically towards progress, knowledge transfer and development for the industry. Transparency is a key thing. There are enormous sums of money in this industry and sometimes we can get led astray, there are examples everywhere. But there are other shining examples where the resource really does develop for the benefit of the nation. I would point to Norway as an example.
David: Is that not one in a million or is there more success than we realize?
Lorin Boyd: Bad news travel faster than good news. You can look around Brazil, Columbia, Ecuador, UK etc. There are successes everywhere. Unfortunately the bad actors sometimes get the biggest news.
David: Do you think that Ghana has the right partners in developing its oil resources? I mean there is the Jubilee consortium and there are a number of companies that you provide services to. What is your overall view?
Lorin Boyd: This is the beginning of the industry in Ghana and its pioneering companies like Kosmos Energy, like Tullow Oil, like Anadarko that explore and find these resources, evaluate the resource for its commerciality and so forth, that really get the ball rolling. As you move further down the progression of the industry I see in the coming years a much larger role for GNPC but also I see other major players coming in.
David: For example there is talk about Exxon-Mobil.
Lorin Boyd: Personally I think that Exxon-Mobil coming to Ghana is a wonderful thing for Ghana and for Ghana’s oil industry. For a number of different reasons. The first is that they have deep water experience the world over, and deep water drilling and production presents some challenges that shallow water and land drilling don’t present.
David: It’s different?
Lorin Boyd: It’s absolutely different. Right now we are going through 6000 feet of water before we even touch the mud line to start drilling the well. So there are a number of different challenges presented by that. Exxon-Mobil has upwards of 40 deepwater developments world wide. They have expertise, they have technology and they have cash. I think they can make a very positive impact on Ghana’s oil industry.
David: Again, the perception is that the benefit tends to go to huge multi-nationals and that the people of the country tend not to benefit?
Lorin Boyd: Well, I suppose there is a danger of that but again that doesn’t have much to do with the business processes or technologies that are deployed in the field. That really is the shepherding of the resource by government and the national petroleum company, GNPC, and again I’m very confident that GNPC are on the right track.
David: What do you make of the experiences in other in countries like Venezuela where there is obviously a huge effort for the state to be in control?
Lorin Boyd: I try not to comment too much on political matters and I would think that the case that you mentioned is more political than industry driven. The resource is one thing and the culture or the aspiration of the government is another. Oil is not magic. It is like any other extractive mineral. It provides opportunities for the nation in terms of cash flow, development, infrastructure needs and more importantly jobs. There are a number of different fields that people can actually go in and make a very good living for generations.
David: Not necessarily on the rigs right?
Lorin Boyd: Not necessarily on the rigs.
David: Because that’s part of the problem. In the Western Region of Ghana there is great interest for jobs on the rig. You say there are limited jobs on the rig. What about the supply chain and all the opportunities there?
Lorin Boyd: Again, we have one rig now in the Jubilee development and there are a couple of other rigs doing exploration work. All told there are probably 300 jobs on those rigs, in order to move into that number of 300, one must prepare; one must have experience. Now I believe it is incumbent on the industry not just Baker Hughes, and just Tullow and Kosmos, but the industry at large, to come with a cohesive and comprehensive plan for development of skills; for trying to assess where the whole thing sits and how it can grow. If Baker Hughes takes these actions independently of others, we’ll have limited success and the same goes for our competitors or our clients. It has to be a concerted effort.
David: How significant is Corporate Social Responsibility for a company like yours? There is certainly room for what you can do to impact beyond your business.
Lorin Boyd: There is a big difference between developing skills and affording relief of misery or poverty. Baker Hughes is committed to being a good corporate citizen no matter where we work, whether it’s Houston in Texas or Miry in Malaysia or Takoradi in Ghana. We are undertaking a couple of programs just now but it’s a bit difficult because you don’t have to look very far to find someone that you can help so we are trying to make an assessment of what the need is and how we can impact positively the most people at once. So we are working with community leaders, government agencies, NGO,’s the US Embassy, the British High Commission to assist us to try to develop where we can help the most.
David: And to do it in a meaningful way I would imagine. This is one of those areas where very often tokenism takes place.
Lorin Boyd: That’s not a path we want to go down. We want to strengthen the communities in which we work. We want to be respected partners in our communities and not just come in and go out. We are here for the long-term.
David: The issue of expectations. What in your estimation or from your experience is the best way to deal with it? You know as well as I do that lots of people have great expectations for their lives since we discovered oil and gas. Is this not legitimate?
Lorin Boyd: I think it’s legitimate but it has to be couched in a time frame or in context. Nothing happens over night and for the industry to blossom and to really take off there has to be transfer of knowledge. For the young people in Takoradi looking for opportunities on the rig for instance; I applaud that and we are looking at how we can partner with the polytechnics to elevate the artisan type skills, but it’s not going to happen over night. We talked about preparation earlier; there is a key to trying to understand the career path or the continuum of the service and really just to think that oil is here and now everybody is going to get a job is probably not the case. There are a number of positions that are going to be opened especially in the later years. This is just a first phase of development and there are other rigs coming and there will be phase two and phase three of jubilee. Tweneboa is being explored just now. Offshore Cape Three Points and the Sankofa wells are all exciting prospects, so I would caution that we let things develop, let them ripen a little bit so that we understand where the true opportunities lie. It’s just like Baker Hughes, we have budgeted to build an enormous facility in Takoradi but I have cautioned that we go a little slower. I want to make sure that we have the right parcel of property, that we have the right foot print, that we can make this facility scalable so that if our expectations are realized we can build more on a smaller footprint. There is one development now but lets make sure that we understand the scope of the future before we rush head-long into any particular process or strategy.
David: For so many years there was talk about oil not being found in commercial quantities in Ghana. And then suddenly, there is oil and it’s not just oil but it’s of a reasonably good size. What happened?
Lorin Boyd: The short answer is technology. Deep water masks a lot of secrets and it’s very difficult to get to but new seismic interpretation technologies, 3D seismic, the drilling equipment and production equipment and technologies all gained enormous ground in the last 10 years and so we are able to go deeper looking for it, and then once we think we have found the prospect we go and actually drill the prospect, but it’s no good to drill if you cant complete it and reap the harvest of that resource. Completions have come a long way in that respect, so there are fields now that are being produced in 7000-8000 feet of water. The Tano deep is just the first in Ghana. There are other plays that will come along.
David: And those are the key areas now, Tano deep and West Cape Three Point?
Lorin Boyd: That’s correct.
David: And these are all deep water?
Lorin Boyd: Yes, they are. The shelf falls off rather rapidly. There is a trench, if you like. It is very difficult terrain, but it is very exciting time for oil exploration. There’s an awful lot of interest up and down the coast of Africa.
David: Is this all part of one geological formation?
Lorin Boyd: There is a school of thought, David, that they are all inter-connected. I don’t know enough about the geological structures just yet to make a comment about that. But it wouldn’t surprise me if this whole province from Sierra Leone, all the way down through Cameroun will be a very hot spot in the coming years.
David: Is what you are doing now going to be very different, once oil production gets started or is it going to be the same thing?
Lorin Boyd: Well, it’s back to the beginning, middle and the end sort of scenario. Right now, we’re setting up our strategies for business. We are equipping our facility. We have an operations base which is located at the old British American Tobacco facility in Takoradi. It is really a very good piece of property for us because it is very close to the port, it is scalable, and we’ve spent an awful lot of money and effort renovating that property, and bringing in specialized equipment and tools so that we can make up all of our instruments.
David: And you are employing some Ghanaians as well, I’d imagine?
Lorin Boyd: Yes, we have an awful lot of Ghanaians on our staff. We have plans to employ even more Ghanaians. But getting back to set up, I mentioned the engineers that we’ve brought on board. More importantly, we talked about the peculiar skills and specific sets of experience to drill oil and gas wells. Well, Baker Hughes is committed to that, if we have a position in the company that doesn’t require that specific or peculiar skills-set, that position will be filled automatically with the best Ghanaian candidate that we can find. Again, I’ve been very excited about the candidates that we have found and deployed in various departments within Baker Hughes Ghana - Human resources, Health Safety and Environment, Finance, Logistics staff, simply wonderful.
David: Do you receive job applications from Ghanaian specialists living abroad also, who have shown interest in returning home to contribute?
Lorin Boyd: We actually have. We have a couple of gentlemen who have repatriated from the United Kingdom. That’s extremely important for us because it assists us and accelerates the training of our new associates.
David: Is Baker Hughes going to be in Ghana for a while yet?
Lorin Boyd: Yes. I personally hope to be in Ghana for the next three or four more years. I have a contract with Baker Hughes Ghana Limited as Managing Director, as you mentioned. But this is a very long term province. There’s no question that this oilfield will be here for decades. Baker Hughes intends to be in Ghana for that entire run, but the complexion of the company is going to change considerably. We have very lofty goals, as one should do, I believe. We’re looking at having 70% of all our employees, in whatever field, at the end of 2012, to be Ghanaian. Right now we have about 37%, so we’ve got a long way to go. One of the things that is key is to get the Ghanaian associate outside into the US, UK, Malaysia, Dubai where we have training centers set up with a volume of work taking place so that they can pick up repetitive motion. We are very bullish on moving forward quickly.
David: Finally Lorin, there is always an influx of expatriates when a major project such as this is underway. Would you say that Ghana is prepared for that sort of thing and can we cope meaningfully or do you sense a strain socially?
Lorin Boyd: I don’t sense a strain. I feel like I have been welcomed here. I really do. I believe that there is a cultural exchange that has to take place and a lot of expatriates don’t really grasp the concept of we-are-not-at-home-anymore and so there is a learning curve. I think it’s a cultural relations issue that each person has to deal with on their own. Personally, I find driving a bit challenging but also a bit lively.
David: But you have settled down pretty well.
Lorin Boyd: Well, as I said, I intend to be here for a long time and one of the things I think its incumbent on any person that travels anywhere is to set aside your previous experiences. Call on them certainly but develop new memories not live in the past. Go forward.
David: Thank you Lorin.
First Broadcast 31st October 2009, TV3 Ghana
