Meet The 38 Year-Old Entrepreneur Who Built A $1 Billion Oil Company In Ghana
Even in the bloated-budget world of oil exploration, $70 million is a lot of money. And yet that’s how much Kevin Okyere, one of Ghana’s savviest yet understated entrepreneurs, has personally expended in developing the highly promising West Cape Three Points Block 2 offshore Ghana (WCTP2).
Springfield Group, the energy conglomerate he founded and controls, owns an 82% interest and operatorship in the block which covers 673 square kilometers in the Gulf of Guinea’s Tano Basin. It’s the first time a homegrown Ghanaian company is exploring for oil, and the stakes are high.
“We can’t afford to fail,” Kevin Okyere quips while nibbling on squid karaage at a swanky Japanese restaurant in downtown Accra, and ignoring the gently buzzing phone on the table. “I mean, we’re the first Ghanaian company to venture into oil exploration. We are in a unique position to set a precedent for indigenous companies looking to participate in the upstream sector. If we succeed, then we’d have sent a strong message – that Ghanaians are just as capable. That’s really important to me.”
He is breaking bread with a couple of team members on this chilly August evening. Garbed in an untucked official shirt, khaki pants and black sneakers, Okyere looks more like the CEO of a Silicon Valley startup than the head of one of West Africa’s most successful energy conglomerates. His look may be modest; his ambitions are anything but. In just 12 years, Kevin Okyere, only 38, has built his company, Springfield Group, into a $1 billion (annual revenues) multi- faceted Ghanaian energy behemoth. Springfield Group is involved in trading and transporting hydrocarbons, terminallingand storage, gas stations, and recently, oil exploration. The company employs hundreds of people in Ghana and Nigeria.
Kevin Okyere was born in 1980 to an affluent family in Ghana’s gold-rich Ashanti region. His father had built a substantial fortune in construction, steel manufacturing and large-scale cocoa farming, before he was enstooled as a traditional chief. Okyere displayed entrepreneurial promise at a very young age. By the time he was 11, he was already selling iced water to football supporters in the Kumasi Sports Stadium to make extra pocket money. During his family’s annual summer vacation trips to London, he would take on jobs with textile companies in the U.K.
“Our family house was not too far from the stadium. I would often put water in our chest freezers at home, and then sell the iced water to the supporters watching the games in the Stadium. Everyone used to call me ‘Eddie Murphy’ in reference to the movie, ‘Coming To America’. The movie was quite recent in Ghana at the time. They used to wonder why I was working when my father was wealthy,” he recalls.
After completing his High School education in Ghana, he proceeded to the United States where he studied Accounting at the George Mason University in Virginia. While studying, Okyere worked several jobs at varying points – caring for mentally challenged patients at their homes, working as a security guard, and at one point working in the mail room at AOL. “Anything legitimate that could earn me money, I took it,” he says.
At the later stages of his Accounting degree, he was able to secure more prestigious jobs. He was one of the earliest employees of XM Satellite radio now (Sirius XM Holdings) where he worked as a radio programmer. He also had a stint at Sprint where he worked in the customer service department. By the time he had completed his degree, he had gotten a job offer from one of the leading commercial banks in the U.S. The job was to pay him $72,000 a year. As tempting as the offer was, Okyere decided to return home to Ghana.
“Unlike the U.S, Ghana was virgin territory for a lot of businesses. There were too many opportunities to explore in Ghana and I knew I could be more successful home than abroad. I knew I wanted to run my own business, but I wasn’t even sure of what I was going to do. My two previous jobs in the U.S had been in telecom so I was more inclined towards launching a business telecom sector,” he says.
Okyere moved backed to Ghana in 2004 and joined his elder sister in her business in order to understand how the country worked. A year after working for his sister, he put together a small team of investors and established Westland Alliance Ltd, a telecoms company that provided international call routing services for AT&T and several international calling card companies. Westland Alliance and its subsidiaries eventually diversified into cell towers and value-added services (VAS) for mobile phone companies. The company was extremely successful, but it wasn’t long before he got tired of the telecoms business and decided to opt out.
“The company was doing very well, but there was a lot of uncertainty with our core business – the call routing business. My contracts with our clients were revisited every year and I realized that my destiny was in the hand of the telecom companies who reserved the right to terminate my contract at any time. I also couldn’t own a mobile telecom company because the license alone cost hundreds of millions of dollars – which was clearly out of my reach. I started planning my exit and looking for the next big opportunity,” he recalls.
In 2006, while still running Westland Alliance, Okyere started working with a business acquaintance who supplied crude oil and condensates to the Tema refinery. As Okyere interacted frequently with this associate, he learned that there was a shortfall of storage facilities for petroleum products in Tema. Flush with cash from his telecom adventures, he acquired land and began building a storage tank farm in Tema, close to the refinery. When he invited officials from Ghana’s National Petroleum Authority to inspect his construction project, they were so surprised that someone so young – he was 26 at the time – was undertaking such a capital-intensive project, and employing scores of indigenous Ghanaians. The officials were so impressed with what he was building, so much that they asked him to apply for a Petroleum Product import license.
That marked the genesis of Springfield Energy’s flagship trading business. Eversince 2008, Springfield Energy has imported refined petroleum products such as gasoline, dual-purpose kerosene, gasoil, naphtha and jet fuel to Ghana. The company is now the dominant importer of fuel products into Ghana with revenues of more than $1 billion in its trading business alone. In those days, only locally owned trading companies were permitted to import fuel products. International oil companies who were looking to do business in Ghana had to partner with locally owned companies. When BP PLC came to Ghana in 2010 and was looking for a trading company they could partner with, the British multinational partnered with Springfield – a partnership that still exists today. Springfield Group has consistently ploughed its profits from its core trading business into building and acquiring other businesses within the energy value train and now co-owns gas stations in Ghana, storage facilities, an oilfield services subsidiary and a haulage company.
In 2011, looking to expand their business beyond Ghana, Okyere and his partner, Geena Malkani, decided to visit neighboring Nigeria to explore opportunities in the downstream space. They formed a new company, Springfield Ashburton, and applied to the state-owned oil corporation, the Nigerian National Petroleum Corporation (NNPC), to be included among the international companies to be awarded the lucrative crude oil lifting contracts. For two years – in 2012 and 2013, Springfield Ashburton tried without success make the cut. In 2014 – three years after Springfield Ashburton had been registered in Nigeria – and after partnering with BP PLC, they were enlisted for the 2014/2015 Crude Oil Term Contract. It was the first time a Ghanaian company – an unknown trading house in Nigerian circles, was awarded the highly coveted long-term oil contract. Nigerian media questioned the selection of a Ghanaian company for the contracts and insinuated that Okyere was a close business associate of Nigeria’s former powerful Petroleum minister, Diezani Alison-Madueke. Okyere is quick to deny any association with her and notes that the newspapers that wrote the stories linking him to the former minister retracted their stories after Springfield successfully sued them in court. Okyere also won financial judgments as well.
“I was not the minister’s associate or acquaintance and we did not have any sort of relationship. Springfield Ashburton was awarded the contract strictly on merit, and because of our sheer persistence. For 3 years since 2011 we had been visiting the NNPC offices every week, liaising with officials of the Crude Oil Marketing department, demonstrating our capacity. They saw our track record in Ghana; we had a turnover of more than $800 million in 2012 even before we won the Nigerian contracts and the records are there. We had the financial capacity and a strategic partnership with BP that gave us an edge to win after our first two attempts. Those media stories were sponsored by our competitors who were unhappy with us,” he says.
Springfield Ashburton still does business in Nigeria and in 2015 was shortlisted by the NNPC for the Offshore Processing Agreements (OPA) – a contract whereby oil traders or refining companies lift crude, refine it abroad and deliver the resulting products back to the NNPC. NNPC subsequently discontinued the entire Offshore Processing Agreements discontinued the Offshore Processing Arrangement, adopting direct trading of Nigeria’s oil instead.
In 2012 Okyere applied for an oil block in Ghana, setting his sights on WCTP2, an oil block with proven reserves on it. Kosmos Energy, a Dallas, Texas-based Oil Company and Tullow Oil, which are currently producing oil from the Jubilee oil field, had just relinquished WCTP2 which was carved out of the West Cape Three Points block, following the delineation of the Jubilee unitization area. The Ghanaian government, worried that Okyere could simply flip the block for a profit, compelled him to set up a full-fledged E&P unit before they could award the block to Springfield Group. The government also required Okyere to commit at least $100 million over a 7-year period in developing the block. Okyere set up Springfield E&P in 2012, but it wasn’t until 2016 – four years later, that the government awarded Springfield the rights to explore for oil on WCTP2 and it was ratified by parliament. Okyere subsequently hired oil veteran Bernard Vigneaux, a former executive of Total and Perenco, to lead exploration efforts.
The block, WCTP2, is located in an enviable position, with Tullow Oil/ Kosmos Energy’s prolific Jubilee field immediately to the west, Hess’ Greater Pecan project to the south and Eni’s Sankofa-Gye Nyame field to the east. The previous operator of the block, Kosmos Energy, drilled five exploration wells in WCTP2 including the Odum and Banda oil discoveries which are substantial. Based on vintage seismic 3D data inherited from Kosmos Energy, Springfield has been able to identify a number of large Campanian-age leads and prospects on the block. The company is currently evaluating about 800-square kilometers of fresh 3D broadband seismic data that PGS’ Ramform Titan vessel acquired on the deep-water block earlier this year, whilst simultaneously conducting exploration activities for new leads and prospects. It’s a ridiculously expensive venture, and so far, Okyere has pumped in $70 million of his own funds into the project. According to him, the entire block is sitting on 3.5 billion barrels of oil and 5 trillion cubic feet of gas. Springfield E&P is set to drill a debut well in January 2019.
“For me, the most important reason we are pursuing this is to prove that Ghanaians can do it. We have a trading business that is doing well, and I could easily take the safe route to making more money by investing in real estate or something less tedious. But we look at ourselves as the indigenous pacesetters in this industry. If we are successful – and we will be, new local players will come up, and that’s very important for the ecosystem,” he says.
When he is not building Springfield Group into Ghana’s dominant energy company, Okyere devotes his time to philanthropy. His Kevin Okyere Foundation in partnership with the Springfield Group supports programmes in education and health across Ghana. The Foundation has a standing agreement with the largest government-owned hospital in the country whereby the foundation funds the hospital bills of poor patients who cannot afford to foot their bills. The foundation pays the school fees of hundreds of Primary school children in Ghana, and he sends some of the country’s brightest students to Universities in North America and Europe.
“I’ve been fortunate in business and in life, and giving back is the least I can do. In the end, I don’t think I want to be remembered as one of the wealthiest Ghanaians; I’d like to be remembered as one of the biggest givers.”
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