Thursday, June 12, 2008

Preparing For Oil Boom in Ghana: Any lessons from others?

Oil field in Ghana

By Mawutodzi K. Abissath

Do not forget this simple but sagacious Ghanaian proverb which admonishes us: “If Sunday will be a magnificent day, it is Saturday that will ignite the taper.”

Ghana is one of the most blessed lands in Africa. Ghana is very, very rich in mineral resources. Ghana is endowed with gold, diamond, bauxite, manganese etc. Ghana has cocoa, timber, arable lands, and rivers, rain forests, nourished with alternating rains and illuminated by tropical sun shine all year round.

However, Ghana has been politically mismanaged for a long time by corrupt politicians and selfish military adventurers who make a ship-load of cocoa to be at large on the Atlantic Ocean. This explains why Ghana had to be christened a Heavily Indebted Poor Country ( HIPC) in the economic history of the country.

In June 2007, just about three months after Ghana had celebrated her Golden Jubilee Anniversary, on 6th March that year, an American oil exploration company called Kosmos Energy in collaboration with Ghana National Petroleum Corporation (GNPC) went to the Castle Osu in Accra to see the President of the Republic of Ghana, H.E. Mr John Agyekum Kufuor. In a typical Ghanaian traditional fashion, President Kufuor and his elders sat down to listen to the scientific and technological visitors.

The leader of Kosmos Energy, Mr. James C. Musselman, who is also the Chairman and Chief Executive Officer of that oil exploration company, told the presidential linguist to inform the President that they had brought good news to him. Then the President responded: “In Ghanaian culture, news cannot be said to be good or bad until it is told. So, therefore, I, the first public servant of the land and my presidential elders are all ears to hear the news you brought this dawn when we are yet to put a drop of water on our tongues.”

It was then that Mr. Musselman told the presidential linguist to inform H.E. that he and his partners had come to announce to the President that Kosmos Energy had discovered oil in commercial quantity offshore the Republic of Ghana on the West Cape Three Points Block in the western region of the country. At first the President seemed not to have heard the message properly. So, he adjusted himself in his royal/presidential armchair, cleared his throat and commanded the presidential linguist to order the Komos engineer to repeat his message. Then Mr Musselman, a little bit apprehensive, as if he had committed some blunder, and with nervous voice said: “Pleeease, eerr –Okyeame, I say kindly inform His Excellency the President that our mission here this morning is to announce to him that our company has discovered about 600million barrels of light oil offshore his beloved country – Ghana.

One would have expected the President to jump to his feet at once and start jubilating.

Instead, President Kufuor further probed: “Okyeame, ask the Kosmos engineer what is the proof that Ghana has discovered oil as he claims.” Then Mr Musselman, put his hand in a goat skin leather bag and brought out a bottle of some dark-brownish liquid. Some of the liquid was poured into a plate. To a layman like this author, the said liquid looked very much like pure honey. “Take this,” says Mr Musselman, “present it to H.E. that this is the proof that Ghana has oil flowing under the sea in the Western Region.”

It was only after President Kufuor, has held the sample of the oil in his own hand and dipped his own forefinger in the honey-like liquid and smelled it before he nodded his head approvingly that Ghana has actually discovered oil in commercial quantity. Then President Kufuor repeated what he said in his broadcast to the nation on the eve of Ghana’s Golden Jubilee Anniversary: “IT IS GREAT TIME TO BE GHANAIAN.”

President Kufuor then expressed his personal gratitude and that of the people of Ghana to Kosmos and its partners for a wonderful job done. He quickly cautioned that honesty, transparency and the spirit of win-win principle must guide the operations of oil companies exploring the “black gold” in Ghana. The President was speaking from experience in terms of the living conditions of people and communities where Ghana’s red gold which has been mined from time immemorial and the environmental degradation being bequeathed to generations yet unborn.

On Tuesday, June 10, 2008, the entire front page of the Daily Graphic was devoted solely to oil discovery business in Ghana. In fact, the banner headline for that day read: Test of well yields positive results. OIL – 120,000 BARRELS IN A DAY Production expected to rise in 2012. This headline was illustrated with a lead photograph in which President J.A.Kufuor was seen congratulating Mr James Musselman, the Chief Executive Officer of Komos Energy, after the latter had briefed the President on the latest development in the country’s oil find. In the same picture were spotted Mr George Owusu, said to be Ghana’s representative of Kosmos, as well as Mr Sekyere Abankwa, Board Chairman of GNPC.

The first paragraph of this lead story, written by Nehemia Owusu Achiaw read: “Commercial production of oil is scheduled to begin in the country in the first quarter of 2010 with an initial output of 120,000 barrels a day.”

The second most important story on the front page of the paper that day, too, had to do with oil exploration in Ghana. It was captioned: “…41 Firms apply for exploration The opening paragraph read: “The Ghana National Petroleum Corporation (GNPC) says it has been inundated with applications from foreign companies expressing interest to invest in oil exploration between January 2007 and June 2008.”

The purpose of this piece is simply to remind the people of this country that whether we like it or not, Ghana is in transition from Oil Importing Country (OIC) to Oil Exporting Country (OEC). In other words, all being equal, there will be oil boom in Ghana, sooner than anticipated, judging from what experts in the industry are saying. Naturally, this calls for jubilation. But it is important for us as a nation to tread cautiously so that the oil find in Ghana will be a blessing and not a curse.

For now this author will only like to cite two oil producing countries in Africa namely, Nigeria and Libya and alert Ghanaians to take note of how those countries are managing their oil boom for the benefit of their people. It appears something is not being done properly in the management of the oil industry in Nigeria. As a result the delta oil rich region is being degraded environmentally. Media reports indicate that the poverty level of people living in that oil rich region in Nigeria is nothing to write home about. Why? No further comments for now.

On the other hand, it seems Libya is doing something worthy of emulating by Ghana. This writer has learnt that there is no single school-going-child in Libya who is not in school. That not a single adult citizen of that country has no apartment for himself or herself. In fact, Libya is a country located in the middle of a desert in northern part of Africa. But Libya has been able to create an artificial river of thousands of kilometers long and is in the process of transforming the desert into a virgin rain forest zone through irrigation schemes. How are Ghanaians preparing for oil boom in Ghana? Are they learning any lessons from others?

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