In the last two years, Ghana’s Oil and Gas industry, pushed down into sluggishness by the pandemic, has also been suffering from a lack of operational activity and new investments. Offshore Africa’s Editor-in-Chief, Mr. Gilbert Da Costa sat down for a chat with Mr. Alexander Shelev, the Managing Director of Stratcon Oil Services Ltd., to talk about his company, its recent participation in the OTC, and his expectations for the future.

You and I know each other from a few years back, and I’m not surprised to see you in Ghana again. Could you tell our readers a few words about your experience and what you do at Stratcon? Yes, I’m quite happy to be back to Ghana after a short break. As you know, I’m not a stranger to this country where I’ve spent a good portion of my career. My first assignment to West Africa came straight after the graduation from the University back in 2003, which was nearly 20 years ago. It gives me chills when I say it out loud. Anyways, back then I started in mining but quickly switched the path to Oil and Gas, where I’ve been working for West Africa focused international companies. I served ten years with Lukoil and helped the company to launch and develop its upstream business in Côte d’Ivoire and Ghana. Over the time, I moved up the corporate ladder and pushed myself into executive roles. At the top of that ladder ascent, I ended up serving as Lukoil’s country manager for Côte d’Ivoire and Ghana based out of Abidjan with regional responsibility for all West African joint ventures and asset management activities across Côte d’Ivoire, Ghana, Nigeria, and Cameroon. From Lukoil I moved to Maersk Drilling, where I had three great and challenging years as Commercial Manager for Africa and Middle East, this time based out of Accra. And that’s when I believe you and I have met. My journey with Maersk has come to an end in late 2021 and shortly after that, in early 2022, I came back to Ghana to join Stratcon’s executive team. In a nutshell, that’s my career path so far.

Quite an impressive one, I must say. Tell us more about your role at Stratcon though. Stratcon is an indigenous Ghanaian holding which, as of now, comprises of six companies – Stratcon Energy and Trading, Stratcon Oil Services, Stratcon Digital, Stratcon Capital, Stratcon Energy and Trading DMCC, Torrid Global and Brittin. As some of these names suggest, the group is active in both down- and upstream sectors of the Oil and Gas industry. My role at Stratcon, as the Managing Director for Stratcon Oil Services Ltd., is to help the holding expand into upstream and develop its operations towards the E&P services market. We have substantial business interests in Oil and Gas, and as such, the group has the ambition to play a significantly bigger role in the upstream sector in Ghana and internationally. We strongly believe that for the industry to move forward, the private sector in Ghana should be in the driving seat and that’s where we aim to be in the next few years.

Correct me if I’m wrong, but it looks like Stratcon is quite new to the Ghanaian petroleum scene. Well, yes and no. We see Stratcon is one of the fastest developing Oil and Gas businesses in the country. The holding has been predominantly active in the downstream area as a major Bulk Distribution Company (BDC) and has been around for years. Today, Stratcon Energy and Trading, our domestic BDC entity, is one of the leading bulk distributors of petroleum products in Ghana. However, you are right in saying that our upstream services branch is quite a recent addition to the local petroleum scene. And that’s exactly where I come into play. Yes, the company is just starting up, but we are confident about our vision for this part of our activities and its future. The GIPC and the Petroleum Commission would probably disagree, but I would still go on to saying that doing business in Ghana is everything but easy. Luckily the company is structuring its operations based on dozens of years of relevant experience of our executive team members and carefully selected reputable partners who are all eager to contribute towards each-other’s success and sustained prosperity.

You were at the last OTC in Houston a few weeks ago. Tell us about this experience. Sure. I believe all your usual readers are familiar with OTC, but for those who just happen to be unaware let me begin my answer by saying that OTC is an annual Offshore Technology Conference which takes place in Houston, Texas. The event typically brings together global executives, government officials, engineers, and investors to share latest technology, expertise, and products knowledge with thousands of delegates and visitors who are coming to the event every year. Traditionally, Ghana would host a pavilion within which its Oil and Gas related institutions and best-in-class companies of the industry would each rent some dedicated space. This year was no exception to this rule, and we are grateful for being part of this success story. Although it has been our first time at the OTC as exhibitors, the feedback from two business units we have showcased at the event as part of Ghana pavilion, Stratcon Oil Services and Stratcon Energy and Trading, was generally quite positive. Our maiden OTC booth was well positioned to attract visitors and we ended up engaging with multiple West Africa focused private sector players and a number of potential JV partners for our Ghana operations. For us, it has been a great platform to explore business partnership opportunities as well as to promote local capability in the Ghanaian market.

One of the important takeaways we have got from our OTC participation was that Stratcon as a brand, despite having a strong identity, is hardly known outside our very core customers’ circle. For me, it was quite surprising to see that even some Ghanaian businessmen had never heard of Stratcon before. This is something that we should put more focus on and will definitely work harder to improve going forward. I can see a lot of investment opportunities in Ghana’s Oil and Gas sector – upstream, mid-, and downstream. Which specific areas excite you the most? Indeed, looks like the Government wants to maximize the country’s prospects in the Oil and Gas and increase the sector’s scope. There is also an intention to undertake the development of a petroleum hub for the sub-region. This is truly an immense undertaking and, if done right, has the potential to boost the whole Oil and Gas sector from upstream all the way to downstream while creating new openings for the Ghanaian economy. At Stratcon, we can clearly see further opportunities coming our way. As a matter of fact, the recent launch of our upstream focused company, Stratcon Oil Services, seeks to bring more investment to that market. Ghana’s offshore potential is still largely underexplored, and international oil companies, at least those who are still hydrocarbon centered, are looking for reliable local partners across the entire upstream value chain, hence our positive outlook for more deals in this area.

Speaking of deals, I’ve heard that you hit it big at the OTC. Can you tell us more about it? It depends on what exactly you’ve heard already. No, seriously speaking, and please don’t take it for bragging, even though it was our first OTC attendance as a company, we did in fact make a couple of significant deals in Houston. For starters, we have signed an agreement with a consortium of private investors to secure not less than 130 million USD. This capital injection will support our local and international expansion on both the trading and the upstream services sides, including the development of our own floating LPG distribution terminal offshore Takoradi. On top of that, we have also formalized our strategic partnership with an indigenous Ghanaian company, Prime Meridian Docks (PMD), that is running a world-class repair and maintenance shipyard facility project in the Takoradi port. And we are quite excited about what’s coming next.

We share the same vision with PMD and can also see how our joining forces may become mutually beneficial for both parties. As you know, in Ghana as well as in the most neighboring countries, Oil and Gas resources are typically found and exploited offshore. Therefore, the whole upstream sector is highly dependent on the maritime industry. We are talking not only drillships or semi-subs, but all kinds of vessels employed in the Oil and Gas from tag boats and PSVs or supply vessels to various cargo ships, FPSOs, large crude and LPG carriers to name a few. All those vessels happen to break down and sometimes require urgent repairs and dry-docking. And, because they are strictly regulated in terms of HSE and periodic certifications, they must be constantly maintained in prime condition (pun intended). As a matter of fact, any decent E&P hub, which Ghana seems to have some serious ambitions to grow into, wouldn’t do well without a well-functioning adjacent repair and maintenance shipyard. All that gives us reasonable grounds to believe that this subsector is set for a steady growth for years to come. By getting together with PMD we are putting all the chances onto our side to become an essential service provider in that space. I think that having a direct and exclusive access to 15,000 square metres of laydown area, a 200 metres jetty, 500 metres of quayside, and a number of integrated facilities that any shorebase would envy, and all of that within a prime location of the Takoradi port, would definitely put us on the upstream services market map. We believe these deals are a great confirmation of our intention to become a leader in the Ghanaian Oil and Gas industry in next few years. How many years? I wouldn’t be able to tell you, but I do think that Stratcon’s future is quite bright.

Sounds promising. As an indigenous company, how do you plan to build local capacity? Ghana has a young and growing population and has been experiencing a significant infrastructure development. Skilled workers are in high demand and this trend is likely to increase going forward due to further unlocking of new industries and hopefully greater investments in the infrastructure, including the clean energy related projects. As I’ve said, we clearly intend to become a leader and a key partner in the industry. One of the most certain ways to achieve that is through continuous investment in the capacity building, skills, knowledge transfer that are all quite vital for the industry to reach international standards and keep up with the fast-paced environment we are working in. Stratcon, as an indigenous company, is fully committed to unlocking the potential of local people. To give you an example, the two infrastructural projects I’ve mentioned earlier will generate hundreds of local jobs, most of which would be long term technical assignments and will therefore require a certain level of expertise and international level of industry certifications. When fully operational, the shipyard alone is expected to employ about 400 workers as permanent staff. To get to these numbers we intend to partner with some of the leading educational institutions to provide bespoke training programs to help our employees develop the skills required to ensure our business’ efficiency and longevity.

Pressure is growing from environmentalists and some Western governments for green energy in Africa at the expense of fossil fuels. What would be the best way to respond to that pressure? I think the best way to respond to that would be paraphrasing the words of a few notable speakers from the OTC panel discussions program. I might be wrong, but I believe it was the Managing Director of Seplat Energy, Nigeria who said that Africa cannot and should not de-carbonize before it actually gets the chance to carbonize. I know it may sound like a twisted joke, but if you take a moment to think about it, it actually makes sense. To expand on that same note, the Ghana’s deputy Minister for Energy, Dr. Mohammed Amin Adam stated that efforts to push Africa into the energy transition corner at the same rate as the big West are counter productive. In times of the global push for energy transition, the bulk of African countries, and Ghana in particular, should rather focus on articulating their best arguments to save its hydrocarbon reserves from being stranded and left in the ground as a needed sacrifice to the energy transition. Should this become the reality, the effects of such transition sprint would inevitably result in underinvestment in the Oil and Gas sector and revenue losses, which ultimately would mean that Africa is, yet again, left behind the rest of the world, and at its own expense. I therefore tend to share the perspective of those who defend each country’s right to own the process of energy transition towards a net zero future at their own pace.

What can we expect from Stratcon in five or 10 years from now? Obviously, I’m far from being a psychic neither do I have a crystal ball to tell you that. But, if I do try to take a glimpse at our future, the ambition is certainly to expand and to firm up Stratcon’s presence in the key points of the entire supply chain of the petroleum industry, from upstream to downstream. Ten years in the future, Stratcon should be an agile, fully digitalized, and vertically integrated holding where each entity is a major player in its own segment. The Africa Free Trade Area Agreement and even the ECOWAS treaty give you a chance to expand into other parts of Africa. These are early days yet, but do you see the possibility of expanding beyond Ghana? Early days it is. And I think we would need another hour or so to talk about that. But let me just put it simply for now – yes, we do. We already have a fully functioning office in Dubai and are indeed making international expansion plans and the best way to learn more about them would be seeing them come true. So, let’s catch up again next year, at the OTC or shortly after, and see how far we would walk the talk by then.