Transparency and probity to avoid oil curse
As President of Ghana, John Evans Atta Mills turned the wheel to officially lunched Ghana into the family of African oil producers, Ghanaian at home and abroad were overwhelmed with joy. Ghanaian friends, well wishers and oil companies were elated. It was a day that will be etched in the annals of the country’s history.
President John Evans Atta Mills joined with other former presidents of Ghana - Jerry John Rawlings and John Agyekum Kufuor together with other dignitaries were on the board of the Floating Production Storage and Offloading (FPSO) Kwame Nkrumah vessel. On the vessel, President John Evans Atta promised his country men and women that they will not be victim of oil curse but rather oil will be a blessing to develop their country.
On the former presidents of Ghana, President Mills gave great compliments on their vision and fortitude on making oil search and discovery possible. On Jerry Rawlings, he said, "oil exploration was greatly intensified and requisite infrastructure and legislation were put in place," while on John Kufuor, President Mills continued, "It was during his stewardship that oil was struck in commercial quantity."
The former President of Ghana, Jerry Rawlings receiving Afripol Achievement Award from Afripol's Emeka Chiakwelu.
Tullow Oil, an exploration firm in 2007 made the crude oil discovery at Jubilee Field and Kosmos Energy confirmed the discovery at Odum-2 appraisal well offshore Ghana . Both Tullow and Kosmos Energy are stakeholders of the oil wells at 22.8 and 30.8 per cent respectively. The well is about 4km northeast of the Odum-1 well, which lies approximately 18km east of Kosmos' Mahogany-1 exploration well and the Jubilee oil field.
“It marks a three-year journey which began with the announcement in June 2007 that crude had been discovered in commercial quantities offshore. The Jubilee Field is estimated to hold 1.8 billion barrels of crude, but there have since been other discoveries which would boost the reserves significantly once appraisal works are completed.”
“The well has encountered a gross reservoir interval of 153 metres containing 32 metres of net hydrocarbon pay in stacked reservoir sandstones, comprising a 17 metre oil bearing zone below a 15 metre gas-condensate bearing zone. A combined hydrocarbon column of at least 350 metres has been established between the lowest known oil in Tweneboa-2 and the top of the gas-condensate at Tweneboa-1, demonstrating this is a highly prospective and extensive turbidite fan system “
Ghana will generate up to 40-50 percent of its foreign revenues from the export of crude oil. Ghana is anticipated to drill 55,000 barrels of oil a day, increasing to 120,000 by next year
When oil was discovered in Ghana, the former president of Ghana, John Agyekum Kufuor proclaimed that “Ghana will fly” with the discovery and subsequent oil production. Kufuor implied that with the new found oil wealth, Ghana will develop and make life better for its citizen. Without being pessimistic, friends of Ghana desire greatly for Ghana to succeed and to show to the whole world that Africans can also be good managers of oil wealth. Many nations including Norway, Britain and other oil producing nations do not have monopoly on sound oil management and accountability, Ghana can do it too.
But it is easier to point fingers to other African oil producing countries, principally Nigeria and Angola, calling them corrupt and insincere for mismanaging their oil wealth. Without doubt these two largest oil producing nations were vulnerable due to paucity of strategic planning and lethargy. The resources they generated from oil exports were not prudently managed and invested for the greater good of their respective countries. Ghana can do better and prove to the world that Ghana can avert the so-called oil curse.
Ghana must be precautious, careful and not overconfidence. No country chooses to be corrupt, but when they failed to set up the civil and social infrastructures to curb and control corruption they may end up become a victim of corruption and lassitude.
Ghana needs strategic planning, transparency and accountability to avoid making the mistakes that comes with steady flow of revenues from oil export. Ghana does not necessarily need perfect individuals to manage their oil wealth but laws, social and civil infrastructures rooted in transparency and accountability to avoid mismanagement.
Transparency and open book
By this the Ghana National Oil company and the government will not hide anything from their citizens. No gimmicks and tricks in the name of national security to keep away the eyes of the people from not knowing the daily transactions by classifying records, data and in formations. The government should allow the people to have access to the information. The government can set up a website that shows the records of daily amount of crude lifted and total revenues derived from daily transactions.
The government of Ghana with the approval of the House of the legislature will nominate intelligent men and women from all walks of life from market women to seasoned business individuals and bureaucrats. These people will be empowered to come up with ideas on how to invest and utilize the oil wealth. The recommendations they give will be approved by the national House and signed into law by the president.
Legislation against corruption
Ghana does not need saints and perfect individuals to run the oil wealth. Ghana needs strong and implementable laws on the book to checkmate corruption and increase accountability. The laws must be enforceable which become check and balance on the system. The laws must have teeth and no individuals will be above the law. A law is necessary to prohibit kick backs and bribery from oil companies and transnational corporations.
Active and probing media
Local media in Ghana and Africa must rise to the challenge and report news without seeking approval from the ‘big’ men of Ghana. The media must be willing to go the extra mile with investigative journalism and keep the people fully informed with the latest developments. Media is the peoples’ last resort to know what the governing class is up to and when the media fails to do the job, it spells a bad omen to a nation.
Sovereign fund and Economic diversification
Ghana may eventually decide to open a sovereign fund to enable the country to invest in international markets with high appreciative returns. The strategic planners will run the fund together with country’s president and the finance minister of Ghana.
Economic diversification is necessary for economic growth and stability. Ghana will not want to suffer the fate of many oil producing countries that focus only on oil at the expense of other sectors of the economy. This is the time for Ghana to invest in agriculture and social infrastructures that will enable the country ‘to fly’ and soars without falling down.
Africa Political & Economic Strategic Center (AFRIPOL) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.
The site is located about 60km offshore Ghana and is expected to increase its production to 120,000 barrels of oil per day, making Ghana sub-Saharan Africa's seventh largest producer, with new wells set to be completed over the next three to six months.
Tullow said the first tanker of oil from the field is expected to be exported in January.
The company and its partners, Anadarko Peroleum, Kosmos Energy, GNPC, Sabre Oil and Gas and EO Group, expect to double production within three years.
Tullow's chief executive Aidan Heavey said history was being made. "First Oil from the Jubilee field is a wonderful occasion for Ghana, its government and people, the Jubilee partners and Tullow," he said. "It is the culmination of a lot of dedication and hard work from a world-class team on a world-class field."
At a televised ceremony today, Ghana's president John Atta Mills opened the valves at the 330-metre-long floating platform.
The start of commercial production came just three years after discovery of oil at the field, named Jubilee to mark the timing of the find 50 years after independence in 1957.
"Oil will be a blessing and not curse," Mr Mills said, echoing widespread hopes among the 23-million population that it can avoid the strife and corruption which nearby Nigeria's oil has brought.
"I'd also wish to restate that revenue from the oil will be used for the benefit of all, and not the benefit of a few."
Ghana is the world's second largest cocoa producer after neighbouring Ivory Coast and Africa's second largest gold exporter. It has a $750 million Eurobond currently yielding around 6.4 per cent.
Ghana expects Jubilee's oil and gas to help double its growth rate to just over 12 per cent next year, funding projects to boost its infrastructure and laying the foundation for new industrial sectors.
Source: Irish Times
Additional reporting: Reuters