In 2007, when Ghana discovered oil in commercial quantities, citizens jubilated with high hopes of economic fortunes like many oil-rich nations have had over the years.
Ghanaians, at the time believed that if gold, cocoa, timber among other natural resource were not enough to enrich the country’s purse for its needs, oil, a well sought global product for industrial economies will definitely be the very solution.
It has been fifteen years, a decade to a silver jubilee, since the jubilation.
Have those hopes been met, surpassed or shortchanged? Has Ghana missed the blessings many other nations blossomed with? Or perhaps, it is too early to ask?
On September 8, 2023, Nana Addo Dankwa Akuffo-Addo visited the FPSO Kwame Nkrumah to turn on the valve and commemorate the official first oil from the Jubilee South Area. The area, which is expected to add 30,000 barrels of oil per day to the greater Jubilee Field will bring the Jubilee Fiel per day production to 100,000 barrels day by the end of 2023.
The project is a joint venture between six oil companies, including Tullow Oil, Kosmos Energy, Kosmos Energy Investments, Ghana National Petroleum Corporation, PetroSA and Jubilee Oil Holdings Limited. The interest in the partnership are as follows:
Tullow Oil: (38.978%), Kosmos Energy: (24.077%), Kosmos Energy Ghana Investments: (14.534%), GNPC: (13.641%), PetroSA: (2.725%), and Jubilee Oil Holdings Limited: (6.045%).
This event reminds the country of the joy of 2007.
In 2007, Ghana discovered hydro-carbon deposits in commercial quantities to a potential tune of 3 billion barrels, the reason for the jubilation then. Many Ghanaians perceived it as the light at the end of the tunnel for the then HIPIC country. Many citizens thought that the new found global commodity could help the country live beyond aid and become self-reliant.
Prior to 2007, Ghana’s Tano and Keta basins have both been explored albeit not in commercial quantities until the discovery of hydro-carbons in the salt pond basin in 1970. In the national bid to protect and secure the development of petroleum and gas resource for the sole interest of the state, Ghana established the Ghana National Petroleum Corporation in 1983.
It is while the country is jubilant after the President turned on the valve, that people like Honorable Kennedy Agyapong cautioned that the discovery might lead to a missed blessing.
Asked for his thoughts on the recent discovery, the then and now member of parliament and aspiring flagbearer of the New Patriotic Party (ruling party as at then and now), confidently cautioned,
“If it is going to be like the gold we have in this country, then I think it is a missed blessing” , he warned.
His doubts about the country’s fortunes seem to have been realized than its hopes.
Development of Offshore Oil Fields
Since the exploration in 2010, Ghana has seen the development of offshore oil fields amongst which are the Jubilee, TEN and Sankofa fields. These fields together have an estimated capacity of about 240 million barrels of oil and 300 billion cubic feet of gas.
Ghana is estimated to have about 5 to 7 billion petroleum in reserves and 6 trillion gas in reserves which is the sixth largest in Africa. This also means, Ghana is the 25th largest in the world.
Despite all of these blessings, Ghana has failed to significantly improve its economic situation significantly over the years. This is a crunch example of what a resource curse means or what Hon. Agyapong termed as missed blessing.
According to the World Bank, 80% of energy revenues benefit only 10% of the population. The situation in Ghana may be no different with the many clouds of opaqueness that surrounds the Jubilee Oil Holdings Limited (JOHL).
JOHL is an offshore company in a tax haven with significant stakes in Ghana’s oil operations. It was recently purchased by GNPC. However, PetroSA who also holds some shares has threatened to sue for part of its recently acquired shares. The dealings of JOHL has been widely criticized by civil society for its negligence and shadiness.
This among others dealings within the industry has been blamed for the poor performance of oil in changing the country’s economic fortunes.
The Public Interest and Accountability Committee, which holds state-owned enterprises responsible, in their 2022 report for Ghana’s decade-long exploration of hydro-carbons stated that Ghana generated an estimated 31 billion dollars from all three oil producing field. Out of the 31 billion generated, Ghana retained just a little over 2 billion, amounting to 6.5% of the generated revenue.
While some revenue from oil has helped the nation to fund significant national policies from road infrastructure, education, and health services, the lives of local folks where these fields operate from remain poor. Usually, cooperate social responsibilities that are so disconnected from the real needs of the people are lavishly published just for the books and applause.
These communities have been very disappointed by the rewards they expected at the discovery of oil on their lands.
Also, after a decade and a half of Ghana’s exploration of petroleum, the country remains highly deficient of the required human resource, technology and capacity to independently run the country’s operations. This vis a vis the country seemingly reluctance to develop such capacity has left the country very little bargaining power on the potential returns of the oil fields.
Coupled with the personal interests of politically exposed personalities, Ghana is given infinitesimal tokens of the great returns from the blessings of the country’s land.
The negotiations seem to have always been in the interest of foreign partners than Ghana’s. Similarly, and yet another time, the recent FPSO Kwame Nkrumah reaffirms the country loss on the potential returns the country could have made.
What then shall we say? Like gold, like cocoa, like timber, has Ghana, yet another time, missed its blessings?
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