Prince Charles Dedjoe: Chadeco Group and the Oil and Gas Industry in Ghana

Interview with Prince Charles Dedjoe, Executive Chairman of Chadeco Group

The oil and gas sector has been developing ever since the first discovery of oil in Ghana in 2007 and consequently the economy has been booming. Can you give us your assessment of the current state of the sector and tell us what the main challenges for this sector are?

The challenges I face are local. I want to talk about the local situation because I am a local. When it comes to hiring exploration companies and businesses in the oil and gas sector, we don’t tend to have these companies locally. We need to develop our country, but when foreign investors come in, the money goes out of Ghana. This is a big challenge for us and so I appeal to the government to strengthen local investment. Oil and gas bring many benefits to this country. Our political stability and the fact that we don´t have any problems when it comes to the transition of power is very good news for investors. Ghana has a lot of oil deposits and there are more to be discovered. The boom we are experiencing is going to continue and increase.

Our revenues need to be used wisely, for example as in Nigeria. I would like our government to learn from Nigeria to help our own development. Security in the oil and gas sector is also a challenge. Nigeria has a lot of problems with oil bunkering, because the creeks are not deep and offshore. So when we start our onshore oil extraction here in Ghana, there will probably also be a lot of bunkering and syphoning of oil. Currently our oil comes from deep offshore extraction but in the future we will also have onshore oil. We have to make sure we learn from Nigeria and not make the same mistakes here.

Were you present in Nigeria? I know you have a lot of experience.

Yes, I have a lot of experience in oil and gas in Ghana and Nigeria.

Can you tell us the essentials about Chadeco Group?

Chadeco Group´s objective is to set up an oil hub in Africa. The only oil hub today is in Rotterdam; there is no oil hub in Africa. Our dream is to set up an oil hub that does everything. We have an oil block of 3,000km2 in the Keta basin. We want to be able to drill, refine, store and distribute our own oil. Nigeria is a huge market in terms of oil refinery, and Dangote is building a huge refinery in Nigeria. The population of Nigeria is about 200 million people, it is the biggest economy in Africa after South Africa and Ghana can fit into Nigeria about 8 times! They have electricity problems which means that everyone uses diesel and so they require a lot of diesel refineries. Our dream is to produce between 150,000 barrels a day to 300,000 barrels a day at Ada. We have already acquired 1,500 acres by the shore to build the refinery.

The company itself has something like 14 different subsidiaries; you are in mining, heavy equipment hiring, real estate development, oil and gas exploration and production, trading and solutions, warehousing and refinery, etc. What is the position of the group at the moment and what are the prospects?

We have set up almost every foundation and have all the licenses ready to be able to really take off. Chadeco Group is owned 100% by me. Whatever profits from the trading that we make are diversified into other projects. We need a strategic partner to buy an equity in Chadeco Group and to come in and run the business with us. We have 3 phases. Phase 1 requires about 1.34 billion dollars and the 3 phases all together require about 8 billion dollars. In 2009 the National Petroleum Authority held some auctions on the 30th June and Chadeco won almost all of the petroleum product contract bids. It was our first bidding in oil and gas and we encountered a number of challenges because the other companies already established in oil and gas already had banking relationships for the trading of petroleum products. When we took over the contracts I would say that we were muffled. No banks wanted to issue an instrument to import because we were new. That is why I decided to open my own bank, called Chadeco Bank. For us to be able to supply for these oil contracts, we had to go outside of Ghana to be able to raise funds. Our main problem here at Chadeco is finance. We need a serious strategic investor, it could be a bank or it could be an individual who can give us a credit line. The potential will be unlimited for oil and gas; Ghana is going to be doing everything in terms of oil and gas.

Why should investors invest in Chadeco Group?

They should invest because we are doing something that no one else is doing here. No one else has these plans for Ghana, we are going to do everything to do with production of oil and gas. I would say that the best reason to invest is the oil block that we have. We have one of the richest oil blocks in this country and when we start production it will produce more than the Jubilee oil field and more than the production that is happening already in Ghana. I have studied it, I have had people evaluate it and I have all the seismic, 2D and 3D data, etc. so I know exactly what I have there. I would say that Chadeco is the best company to invest in.

Furthermore you are the sole, 100% owner of this block and you are the only Ghanaian owner of an oil block.

In 2009 I decided to go for an oil block. Other Ghanaians facilitate foreign investors by making all the connections to help them get the oil blocks. There are no Ghanaians who have a major stake in any other major exploration companies except for Chadeco block. All of my profits and income were ploughed back into acquiring the block. For now, I am the only Ghanaian who is the sole owner of an oil block. The only company that was a shareholder with Tullow was ENO Group and they had a 1.75% share but they sold it! So now there is no Ghanaian interest in the Jubilee field except for the GNPC carried interests of 10%, that´s all.

I believe in the local contacts, I believe in developing my country. This is where I was born and where I shall stay and develop. You don’t have to be the president to develop this country, we all have a responsibility. We all have to support any government that is in power. I will support our government because I believe in them, I like their strategies and know that they will do well. I call our president our ´fortune president´ because now we see that investors are coming. I advise all Ghanaians to be responsible and to be determined. I am very determined, if I see an obstacle I am determined to break it down and to move forward.

Can you tell us about what is going to happen in December?

My title is Prince, my name is Charles Dedjoe, and I am from the first family of Anlo State which is in the south eastern part of the Volta region of Ghana. On December 14th I shall be adored as the new overlord of Anlo State.

Which is like a king?

It is not like a king, I will be the king of all of the Anlo people and Anlo state is where we have a large oil and gas deposit. It is an oil-rich state.

There are two large kingdoms in Ghana…

Yes, there is the Ashanti Kingdom and the Anlo Kingdom; I will be the king of the Anlo Kingdom. These are the only two powerful kingdoms in Ghana.

What is your hurry to find someone to invest?

I am in a hurry to find someone to invest because soon I shall be the king. I won’t be able to manage the company as I do now. I have up until about the 29th November because then I shall be going into confinement for 7 days and after that there will be an installation and a special ceremony. Therefore I have up until the 29th November to find an investor who can take over from me. However I shall remain Chairman of the Board because as a king in this country I will have a lot of influence.

Can you tell us what influence the king has and what your role will be? People from other countries may not understand how it works here as Ghana has an elected president and government but it also has two kings and kingdoms.

What makes a king powerful here is that his people listen to him. Politically, if you tell the people to vote for a certain party they will listen to you and that makes you politically strong. I can see that my region is not developed. I rejected the position at first but then I decided that I need to support my people and make use of what we have on that ground. We need someone who has a vision; the area is rich in oil and gas and therefore we need someone who is experienced in the field and that is me. Furthermore I am next in line to the throne. If it is not your birth right you cannot become king. I really need an investor now so that I can manage my state well.

Can you tell us about your state? What would you like to develop there?

What I want to do for my people is to make sure the revenue from oil and gas is utilised well. There is a big problem in Anlo state of underdevelopment. We have tourist attractions that need to be developed, we have oil and gas reserves that need to be developed, we have land for farming that is undeveloped, and we have salt mines that need to be developed. Salt is used in the drilling of oil and gas. We ought to be one of the biggest salt producers but we are not developed in this sector. We need sea defences because we suffer from sea erosion. My people need a leader like me who not only will use the people´s money but my own personal money to support and help them. I won’t have to wait for the government to give me money or for some donations; I have my company. I am going to produce oil and I will set up 8% of my revenue to be called the ´social responsibility levy´. Apart from the royalties that I will pay to the government and the state, this levy will go towards my state, to develop the region. There is no university or commercial activity as I would like in my region. I have travelled all over the world and the development I see in many countries, I do not see in my area. Accra is developing but my state is not. We vote in good will for political parties but nothing really happens. My dream is to make sure that what belongs to us is not taken away from us. This is one of the main reasons that I accepted the throne. I wanted to do business; I have been working for 17 years to get to where I am now. I am an orphan, my father died when I was 12 years old and my mother died when I was 16. I had nothing at all then, I had to pay for my own school fees but I inherited a good name, which is one of the best things to inherit. Before my father died he said “a good name is better than riches”. He was a good man; he was a colonel in the army. He built the Volta region. He was the Regional Commissioner, which are now called Regional Ministers. He served in the Second World War and came back and was commissioned as an officer, he then retired from the army in 1966. He built the Regional Coordinating Council. He did a lot for the region of Volta. I know that I have inherited his good name and his hard work. I will do a lot for my people. My father was not a very rich person but he took care of all of us. I went through a lot of hardship after he died but I know his spirit looks out for me. I started this business from scratch. Most people travel to Europe or the USA to make money, but I made money here before I even stepped on an airplane. The first time I went abroad was in February 2002 when I went to America. There is money to be made in Africa, I don’t need to travel abroad to make money. The airplanes are coming here full of people coming to make money. Most Ghanaians can’t see that because they are too lazy. They have to persevere and be determined. I started this company from scratch and I am very happy that I have built up a good company.