On October 8 Richard Ellimah published the following on GhanaWeb, which articulates many of the important questions for Ghanaians regarding the exploitation of oil resources:
Environmental Impact Assessment Of Jubilee Field And Matters Arising

Ghana Oil truck and worker

Ghana Oil truck and worker

The public hearings which are a mandatory part of the processes towards securing a permit to start oil drilling are almost over. At least, all the oil affected districts – Jomoro, Ellembele, Nzema East, Ahanta West, Shama and Sekondi-Takoradi – have had the opportunity to interrogate the Environmental Impact Assessment (EIA) of Tullow Oil and her partners.

Judging from press reportage of the hearings, some critical issues need addressing. First of all, it is obvious that people within the six districts that will be affected barely have enough information about the oil that has been discovered close to them. They therefore are incapable of participating in processes that would help them deal with any possible impacts that will occur. The information they have does not go beyond the rudimentary chorus of “Ghana has discovered oil”. Information is absolutely necessary to enable affected people make crucial choices. Absence of information produces half-truths. As people who will suffer potential impacts of the oil industry, they have a democratic right to information. For instance, to what extent has the district assemblies been updating communities on the impacts of the oil discovery to enable a more coherent response to be prepared? Already, fisher folk in these districts have started suffering some impacts. They have been instructed to steer clear of a particular radius of the oil rig. Incidentally, all the fish appear to have taken cover in areas close to the rig, making it difficult for the fishermen to get them without incurring the displeasure of the navy that patrols our territorial waters.

Furthermore, the public hearings have re-opened debate about environmental impact assessments. Judging from what happens in the mining sector, these are highly technical reports which even the average educated person cannot read and understand, let alone interrogate. The Non-Technical Executive Summary alone of the Jubilee Field EIA is 62 pages. Public hearings are supposed to be an avenue for the oil companies to tell the people how their operations will impact them and the measures that have been proposed to deal with these impacts. At these hearings, the public can question portions of the report that, in their opinion, are unsatisfactory and proceed to make inputs into it. These inputs are then taken onboard in the design of an Environmental Management Plan which the companies are expected to submit to the Environmental Protection Agency (EPA). Unfortunately because capacity is low at the local level, the public most times, make little or no inputs at all into the process. Sometimes, the few educated people may also raise issues which are either over-blown because they have not had time to look at the report and make informed comments, or simply make comments out of ignorance. Probably this calls for a review of the design process of the EIA so that it can be disseminated to community groups in a language they understand, over a period of time so that they will be fully armed to question the process. These one-day public hearings where uninformed people are expected to comment on technical documents do not help. One is tempted to describe the process as being only cosmetic. Simplifying the process is critical to enlightening affected people on the potential benefits and problems. When actual drilling begins, they would therefore have been armed and well prepared for the impacts.

Another major concern is the over-concentration of all activities in the Sekondi-Takoradi Metropolis. Curiously, all literature about the oil find acknowledges Takoradi as potentially the most impacted community. Indeed, the non-technical executive summary of the EIA of the Jubilee Field only acknowledges Takoradi Metropolis and Shama District as the most impacted communities. A comprehensive population profiling has been done for these two communities in the document, curiously leaving out the three Nzema Districts and Ahanta-West District. Though attempts have been made to address this in the main technical document, it is still not enough to assuage this unpardonable error. At this stage of project development, it is dangerous to give any group of people the impression that they are being marginalised. As a result of the undue emphasis on Takoradi and Shama District, interventions have been narrowly designed to address their socio-economic problems. It is undisputable that Takoradi is the major urban centre with all the facilities and services that can support the industry. It also does not take away the fact that other satellite communities need to be developed. The best way to do this is to re-locate some of the functions and activities concentrated in Takoradi to communities like Axim, Essiama, Agona Nkwanta and Half-Assini. This, apart from decongesting the Metropolis will also lead to a spread of infrastructural development in the other districts. This requires a concerted policy direction from government to address the imbalances in settlement development in the region.

The oil companies have committed themselves to undertaking rigorous corporate social responsibility (CSR) as a way of ameliorating the impact of their activities on the communities. There is no doubt that oil drilling will have some socio-economic and environmental impacts, though much of the drilling will take place offshore. Designing a comprehensive, community-sensitive and coordinated corporate social responsibility programme will go a long way to help. Historically, CSR has been a voluntary initiative by industry. Current practice has called for a radical review of the way CSR is conceptualised. For instance, in the mining industry CSR has been used as a balm for soothing community demands for fairness in their dealings with the mining companies. More often than not, companies have undertaken social responsibility projects more as a deliberate attempt at boosting their corporate image rather than a genuine effort to address community concerns about their operations. To make it more practical and relevant, I propose that legislation on social responsibility should be passed. Like happens in the forestry sector, companies wishing to undertake oil exploration and drilling should be compelled to sign social responsibility agreements with their catchment communities. This initiative will serve two purposes. Firstly, it will ensure bottom-up development planning by encouraging the fullest participation of ordinary community people in deciding what kind of development they want. Doing this will ensure that resources are channelled to areas where they are specially needed. Besides legislating CSR in the oil sector, there is also the need for a more coordinated approach to providing projects within the oil catchment areas. The district assemblies in these areas should not under any circumstances be sidelined in the provision of CSR. I propose that every CSR endeavour must find space in the Medium Term Development Plans of the district assemblies. This way, development will be better coordinated and ensure that resources are channelled to priority areas of development.

The other concern that the EIA presents is the human resource requirement for the project. According to the report, 760 people will be employed in the initial development phase of the project. This figure will however, drop to 300 during actual drilling. My concern is not with the number but the fact that 50 percent of this 300 will be expatriates before the percentage drops to 10 percent within four to eight years. What this effectively means is that between 4 – 8 years of the project life, only 150 Ghanaians can be employed in the oil business. The 50 percent expatriate participation is extremely high considering that Ghana has enough capacity to handle some of the middle-level positions that the companies will be requiring. The Ghana National Petroleum Corporation (GNPC) that has been in the oil business for more than 20 years has enough trained Ghanaians who can handle any position in the companies. Some of these Ghanaians have even supported the oil sector of countries like Qatar, Gabon, Angola, Nigeria, United Arab Emirates and Mozambique. We do not need to wait for eight years to put Ghanaians in positions where their expertise can be utilised.

Finally, there is the absolute need for transparency in the oil industry. Transparency here does not only refer to revenues that will accrue to government and other stakeholders but also includes transparency in terms of the disclosure of the content of all agreements our governments have signed with the companies. Full disclosure will clear doubts that the country’s interests have been sacrificed for a pittance. This is where civil society groups must be more proactive. They should not wait for these agreements to be signed and operationalised before raising the red flag. Right from the beginning they should engage the stakeholders to ensure that the country is not short-changed.

Ghana cannot afford the luxury of waiting for another generation to correct mistakes that it has committed in the prudent management of her resources. Next door neighbour Nigeria has a lot to teach us about what can happen if the right structures are not put in place in the management of oil. If Nigeria is too extreme an example, let us consider what over a century of mining has done to the country.

The author is a Development Practitioner and resides in Obuasi. He can be reached on Post Office Box UPO 853, KNUST-Kumasi; or on telephone 0244-514559; and by email on richellimah (at) yahoo.com.
photo credit
* * * end * * *

From the comments on the article:

Ghanaba Papa: Good Comment:

The traditional councils in the impacted areas should also be part of the monitoring and reporting on the effectiveness of the Environmental Management Plans. Also, the impact of the oil activities on agriculture (fishing), as you allude to, nust be fully addressed and mitigated.

Slugger reemphasizs the final paragraph: Way Forward:

Ghana cannot afford the luxury of waiting for another generation to correct mistakes that it has committed in the prudent management of her resources. Next door neighbour Nigeria has a lot to teach us about what can happen if the right structures are not put in place in the management of oil. If Nigeria is too extreme an example, let us consider what over a century of mining has done to the country.

I know: CSR:

The CSR personnel at Tullow are actually not CSR experts. They were put there for political expediency. At best, they are only Public Relations Practitioners, and not professionally trained Social Impact Assessors.

Any good environmental and social impact assessment should profile communities “directly impacted” by the extractive industry, be it mining or oil and gas exploration, construction and production. And the assessment must include environmental, economic, social, cutural, and health impacts, and detail mitigative measures that would be put in place to ameliorate the negative impacts, as well measures to advance income enhancement and community development interventions necessary for sustainable development. These are lacking in the draft EIS.

Reading through the draft EIS,it is apparent that the team is heavily skewed for marine engineers than social assessors. And that is the cause of the flaw.

It is not too late to amend. Otherwise we are heading for another Ogoni!!! Who knows whether it is deliberate. I dont trust these guys, anyway.

Marcus Ampadu: REMEMBER KEN SARO-WIWA:

Environmental groups in Ghana should organize and position themselves to closely monitor the ecological consequences of the oil exploration and drilling in the affected areas. One activity we shouldn’t allow is gas flaring.
We shouldn’t wait for something terrible to happen environmentally to tragically get our version of Ken Saro-Wiwa of Blessed Memory.

There is more in the comments discussing these issues.

Over at Say It Loud Patriot Turncoat writes:

A Model for a Petrochemical Industry in Ghana

Ghana expects to generate about $3.5 billion a year in revenue from the export of crude oil. For a country with a population of 25 million, this translates to only about $140 per person per annum, as compared to some middle-eastern countries where tens of thousands of dollars are generated per person from the mere export of raw crude oil.

In other words, if Ghana were to focus merely on exporting raw crude oil, there would not be enough money to make all Ghanaians happy, so a few would be made happy at the expense of many; a recipe for resentment and political agitation, more so given the high expectations.

We can however make a large number of Ghanaians happy by facilitating and creating the right business environment for the establishment of petrochemical industries to add value to crude oil. Such an industry would provide employment for many while generating higher returns due to the value-add. For the African and world market, Ghana could produce assorted chemicals, insecticides, fertilizers, plastics, engine oil, machine lubricants, power steering fluids, detergents and soaps, paints and varnishes, pharmaceutical chemicals and many more. After all, merely exporting crude would only feed the petrochemical industries of foreign nations, generating more employment for their citizenry while our citizens are left unemployed and destitute.

We are all aware of how exporting raw cocoa, without first adding value, has fed the chocolate industries of developed nations at the expense of our economy. Same applies to other raw material exports. …

Fortunately, Ghana does not have to reinvent the wheel. There are working models all around the world which Ghana could adopt and adapt to address her specific needs.

For example, we could model Ghana’s petrochemical industry after Houston’s Spaghetti bowl which has several miles of pipe-lines connecting salt domes, fractionation plants, chemical plants, and refineries. The pipeline system emerged under private ownership in the 1940s to feed an ethylene production industry, thus paving the way for Houston’s petrochemical industry which provides employment to millions.

Patriot Turncoat has some good ideas, but shows an uncritical faith in free markets. Recent events in global capitalism demonstrate the need for some skepticism and oversight.

Today there are further developments in the issue of the sale of Kosmos’s stake in the Jubilee Field.

Kosmos’s Ghana sale bid “illegal” -GNPC source

ACCRA, Oct 12 (Reuters) – State-run Ghana National Petroleum Corp (GNPC) has told Kosmos Energy that it does not recognise a deal to sell its stake in the Jubilee oil field to Exxon Mobil (XOM.N) as it was illegal, a NGPC source said.

The source, who declined to be named, also said that Ghana had received expressions of interest from the China National Offshore Oil Corp for Kosmos’s stake but the West African state was ready to buy it all and decide later with whom to partner.

The Jubilee field is one of the largest oil finds in West Africa in the past decade and sources said last week that Exxon Mobil had reached a multibillion-dollar agreement with Kosmos to buy its stake in the field. (Reporting by Kwasi Kpodo; Writing by David Lewis)

And this story has also popped up today:

Fight For Ghana’s Oil: Exxon vs China

… China, Ghana petroleum co in talks
… Kosmos To Sell To Exxon Mobil: WSJ
… GNPC says Kosmos sale bid illegal
… Officials in Ghana says no approval yet
… GNPC ready to buy entire Kosmos stake
… Morgan Stanley hired to advice

A Kosmos official confirmed that the energy firm has a “binding deal” in place to sell an interest in the potentially vast Jubilee oil field in offshore Ghana to oil major Exxon Mobil.

The deal — valued at an estimated $4 billion — would mark Exxon Mobil’s largest acquisition in about a decade.

It comes amid reports that China National Offshore Oil Corp. (CNOOC) – see report below – could also bid on assets off the coast of Ghana.

Kosmos Vice President and Chief Financial Officer Greg Dunlevy said in an e-mail to MarketWatch, “I can confirm that Kosmos has entered into an exclusive, binding agreement with (an affiliate of Exxon Mobil) to make a rival bid for Kosmos’ stake in the field, known as Jubilee.”

China National Offshore Oil Corp is in talks with State-run Ghana National Petroleum Corp to bid for a stake in a large oil discovery off West Africa, the Wall Street Journal reported on Monday, citing unnamed sources.

The offer for Kosmos Energy’s stake in the discovery, Jubilee, would rival a $4 billion bid by Exxon Mobil Corp, the Journal said. The paper said CNOOC and GNPC plan to submit a strong competing bid in the next few days, citing one person familiar with the matter.

According to the Journal, the Chinese company sent some senior officials to Ghana several weeks ago, including CNOOC Chairman Fu Chengyu. The paper said CNOOC committed to an equity stake for GNPC in the deal and discussed helping the Ghanaians develop their national oil company.

State-run Ghana National Petroleum Corp (GNPC) believes Kosmos Energy’s deal to sell its stake in the huge Jubilee oil field to Exxon Mobil (XOM.N) is illegal and is ready to buy the stake itself, a GNPC source said on Monday.

Ghana has received expressions of interest from the China National Offshore Oil Corp for Kosmos’s stake, according to the source, who declined to be named. But the West African state is ready and able to make the purchase on its own, and would decide later with whom to partner.

The Jubilee field is one of the largest oil finds in West Africa in the past decade and sources said last week that Exxon Mobil had reached a multibillion-dollar agreement with Kosmos to buy its stake in the field.

“We have formally notified (Kosmos) that we do not recognise whatever agreement they reached with Exxon — we told them we disapprove of it because it’s illegal,” the GNPC source said.

The source said Kosmos had violated Ghanaian laws when it shared confidential exploration data with over 20 companies for its own commercial purposes without giving the GNPC any prior notification.

Ghana is due to start pumping oil from Jubilee in late 2010 and the country’s oil finds and relative stability in a turbulent region are luring investors.

The Wall Street Journal reported on Monday that China’s CNOOC was in talks with Ghana to rival Exxon Mobil’s $4 billion bid for Kosmos’s stake in Jubilee.

The GNPC source confirmed that the CNOOC was interested.

“But as far as GNPC is concerned, that also remains only as an expression of interest, like many other companies … It could be any company — it could be the Chinese, it could be Exxon,” the source said.

Kosmos owns the field with UK-based oil explorer Tullow Oil and Houston-based Anadarko Petroleum ). It put its interest in the field on the market earlier this year.

I want Ghana to get the best deal. A deal that involves jobs for Ghanaians and training, high end jobs, and environmental protection. Neither Exxon, nor the Chinese have good records or reputations in this regard. It is up to the Ghana Government to get and enforce the best deal for Ghana and the Ghanaian people.

So my question is, what, if anything, is going on under the table? Who may be getting paid for what? It is much easier for the Chinese to pay bribes than for Exxon, although Exxon is resourceful. Or is GNPC being revolutionary, and actually looking out for the development interests of Ghanaian citizens, by trying to add value to the deal? I surely hope so. We know the Chinese government is involved. Is the US government involved as well? Given the culture of corruption that was heavily institutionalized by the previous administration, and the tradition of corruption in the oil industry, in which neither Exxon nor the Chinese have clean hands, I fear there are too many people who look at the previous administration and see government service as a path to wealth. I believe President Mills is an honest man who cares deeply about doing the best for Ghana and Ghanaians. I don’t know about his ministers. I reserve judgement about intentions or motives unless I know or can see more.