Ghana oil


At the end of November 2011 there were panicky headlines saying Ivory Coast Claims Ghana’s Oil Fields. This was not the first time. The claim had been published much earlier in the year and on examination it appeared more alarmist than serious at that time.

Map of Dzata oil field off Cape Three Points Ghana and Ghana offshore oil.

The more recent November reports in the newspapers were based on actions and claims made by Ivory Coast at the 18th Africa Oil Week conference in Cape Town between Nov. 2-4, and reported in Africa Energy Intelligence #663 in November. Africa Energy Intelligence requires a subscription. The report was repeated in Connectionivoirienne.net.

What follows is a google translation that includes the information from Africa Energy Intelligence N°663:

The oil war between Ghana and the Ivory Coast will she be?
Posted by The Editor · Connectionivoirienne.net
November 10, 2011 at 22:30

Tension mounts for the control of the offshore –

Read for yourself in the Intelligent d’Abidjan –

The 18th edition of the Africa Oil Week in Cape Town (from 2 to 4 November was an opportunity for the director of oil from Ivory Coast, Ibrahim Diaby, and the CEO of Petroc, Daniel Gnangni to present the new map of oil blocks in the country. A notable change has been introduced: five new licenses, ranging from CI 540 to 544, were drawn to the east of the Ivorian waters. These boundaries are superimposed on several blocks in Ghana, including Deepwater Tano, where Tullow Oil has made significant discoveries in 2008 and 2009, with Tweneboa and Enyenra. These two fields are already in a phase of development. Ghanaian ministers, including that of justice, march in Abidjan since September to try to clear the record. A document from the Ministry of Petroleum and Petroc was sent in early October to fourteen opéraeurs in territorial waters and the main Ivorian embassy to explain the position of the country. Requested by Africa Energy Intelligence, executives Ivorian Ministry of Energy indicate that for several decades, Côte d’Ivoire Ghana tries to associate the delimitation of the maritime boundary, but no agreement has never been reached. In Abidjan, Accra took advantage of the political crisis that has prevailed in Côte d’Ivoire since 2002 to allocate blocks in the disputed area of ​​the offshore, particularly in Tullow. After trying to open talks, the president Alassane Ouattara now wants to force his neighbor to negotiate as soon as possible, that is to say, before Tweneboa and Enyenra come into production. Source: Africa Energy Intelligence

In the reports that came out the beginning of March, the oil companies dismissed the Ivory Coast claims.

Dzata 1 oil well is within Ghana’s boundary – Vanco Oil


The Chief Operating Officer of Vanco Limited, J.L Mitchell, operators of the Dzata- 1 Well, located offshore Ghana, in the Tano basin of the Cape three points Deep Water Block, has told Citi News that their block is well within the maritime boundaries of Ghana.

According to him, Vanco has no concern at all over reports that neighboring Ivory Coast is making claims for some parts of Ghana’s maritime Boundary.

… the Dzata Well is over 200 kilometers away from Ghana’s maritime boundary with cote-d’Ivoire.

“It’s very far; 200 kilometres away from the maritime boundaries and it doesn’t affect us one way or the other…It is well within the Ghanaian maritime boundary,” he said.

Jubilee field is the closest oil field to the Ivoirian border, and it is still 60 miles east of that border.

My conclusion then was that if the oil companies were not worried, there was no reason to worry. They would have determined these issues for themselves, to secure their investment before drilling.

More recently, in November it sounded as if the oil companies might be saying something different.

Ivory Coast Claims Ghana’s Oil Fields November 30 2011


Texas-based oil explorer, Kosmos Energy has expressed fears about the development. The oil producer says the future of a portion of its license in the Deepwater Tano Block is uncertain as the issue remains unresolved. Kosmos fears that if changes are made to the maritime boundary demarcation between Ghana and Ivory Coast, it may lose some of its license. It has 18% stake in the Deepwater Tano block in the Gulf of Guinea.

The Dzata-1 well and the Deepwater Tano fall within the same boundary. Currently Ghana is the rightful owner of the area, but Ivory Coast has petitioned the United Nations to demarcate the Ivorian territorial maritime boundary with Ghana. Even though the two countries met in April 2010 for negotiations on the matter, Kosmos says the results of the meeting were not announced and the issue remains unresolved at present.

“Uncertainty remains with regard to the outcome of the boundary demarcation between Ghana and Côte d’Ivoire and we do not know if the maritime boundary will change, therefore affecting our rights to explore and develop our discoveries or prospects within such areas”, the Warburg Pincus and Blackstone Group (BX) backed company said in a filing form to the US Securities and Exchange Commission on April 25, 2011.

I wondered if the oil companies were leaning on Ghana in order to extract more profit. And I wondered if the US government might be behind that as well. As the wikileaks have shown us, most US diplomacy seeks to advantage US corporations. I was also certain Sarkozy was supporting Ouattara’s attempts to claim Ghana’s oil.

Sarkozy and Ouattara puppet

In looking for more news of the oil and border issue I found nothing new. So I checked the financial news associated with the oil companies going back through 2011, Tullow and Kosmos.

Barclays upgraded Kosmos in December 2011.
Ghana Jubilee oilfield partners buy FPSO vessel in January 2012.
Tullow aims for 120,000 bpd from Ghana early 2012 in December 2011.
These were the recent financial stories concerning Ghana, no worries here about boundary disputes with Ivory Coast. If the border dispute was a threat to the companies, it would show up in the financial news. The fact that there is no mention of the border issue leads me to think it is mostly a non-issue. At this point I believe Ouattara would like to stir up trouble in Ghana for President Mills (Ouattara holds a grudge for his perception of post election events) and both he and Sarkozy are greedy for oil. But Ghana does not really have much to worry about on this score. There is not that much to dispute about the border that will cause any problems with oil companies and oil licenses, though the border agreements do need to be finalized.

oil

In February 2010 the USGS published: Assessment of Undiscovered Oil and Gas Resources of Four West Africa Geologic Provinces (USGS Fact Sheet 2010-3006)

Four geologic provinces located along the northwest and west-central coast of Africa recently were assessed for undiscovered oil, natural gas, and natural gas liquids resources as part of the U.S. Geological Survey’s (USGS) World Oil and Gas Assessment. Using a geology-based assessment methodology, the USGS estimated mean volumes of 71.7 billion barrels of oil, 187.2 trillion cubic feet of natural gas, and 10.9 billion barrels of natural gas liquids.

Figure 1: Locations of four assessed geologic provinces located along the northwest and west-central coast of Africa.

Table 1. West Africa Provinces assessment results for undiscovered, technically recoverable oil, gas, and natural gas liquids.
Largest expected mean field size in million barrels of oil and billion cubic feet of gas; MMBO, million barrels of oil. BCFG, billion cubic feet of gas. MMBNGL, million barrels of natural gas liquids. Results shown are fully risked estimates. For gas accumulations, all liquids are included as natural gas liquids (NGL). Undiscovered gas resources are the sum of nonassociated and associated gas. F95 represents a 95 percent chance of at least the amount tabulated; other fractiles are defined similarly. AU, assessment unit; AU probability is the chance of at least one accumulation of minimum size within the AU. NGL, natural gas liquids. TPS, total petroleum system. Gray shading indicates not applicable.

West Africa Provinces assessment results for undiscovered, technically recoverable, gas, and natural gas liquids

The entire document is 2 pages, linked from here: Assessment of Undiscovered Oil and Gas Resources of Four West Africa Geologic Provinces. Due mostly to the odd way they have handled fairly simple graphics, the 2 page document is 7.5MB. I’ve made the map and the chart into web graphics here. You can click on them here to enlarge.

When you read about US foreign policy in West African countries, or about US Africa Command activities in West Africa, keep the map above in mind.

________

NOTE: The figures above refer only to undiscovered oil. They do not include fields that have already been discovered and whose size is known, and do not include fields already in production.

The areas marked on the map do include fields that have already been discovered, and fields already in production, since many discoveries and production are in those same geologic provinces where there are estimates of undiscovered oil.

Dec. 15, 2010 marked a great day in the lives of many Ghanaians because Ghana joined the list of countries producing oil on a commercial basis. The question on most people’s minds is: How does this benefit us (Ghanaians)?

Ghana's President John Atta Mills turns on the valve to allow the first barrel of crude to flow from the Jubilee offshore oil field on Dec. 15. Ghanaians welcomed their country's first oil on Wednesday, optimistic they can enjoy the economic benefits without the troubles that oil wealth has brought other African countries. CTM Communications/Tullow Oil/Reuters

His Excellency John Atta Mills, President of Ghana, was in Sekondi-Takoradi, where he was flown offshore to the FPSO Kwame Nkrumah to open the valves to make way for the flow of first oil. Jubilee Partners, which include Tullow Oil plc (34.7 percent), Anadarko Petroleum Corp (23.49 percent), Kosmos Energy (23.49 percent), Ghana National Petroleum Corporation (GNPC) (13.75 percent), Sabre Oil and Gas (2.81 percent) and E.O. Group (1.75 percent) participated in a formal celebration to commemorate the first oil, hosted by the president at the Takoradi Air force base.

The first phase of production at the Jubilee oilfield has begun, ramping up to 55,000 barrels of oil per day (BOPD) this month and 120,000 BOPD during the first half of 2011 as additional wells are completed. This marks the beginning of Ghana’s first significant commercial oil production and will allow the country to join the ranks of sizable West African oil exporters.

Estimates on the quantum of Ghana’s oil wealth vary hugely. The common starting point is that Jubilee will produce about 120,000 barrels per day and some $1.2 billion in government revenue a year for 20 years.

Map of Ghana offshore oil fields including Jubilee, Tweneboa, and Dzata

The adjacent Tweneboa field is reckoned to be as big as Jubilee’s, but industry experts forecast the biggest finds will be onshore in the Keta basin. With companies like Exxon Mobil, BP, ENI and Sinopec vying to buy equity in the Jubilee field, the assumption is that Ghana has several billion barrels of reserves.

Location of the Keta basin study area, wells and proximity to other fields in the Gulf of Guinea Province.

David Throup of Online Africa Policy Forums Blog points out that:

Ghana urgently needs to improve its infrastructure: it needs new sewers and water pipes and ring-roads in Accra, a revamped electricity grid, improved generating facilities at Akosombo, improved rail-links from Accra to Kumasi and Tamale and on to Burkina Faso, and a renewed and extended network of secondary and tertiary feeder roads through the rural hinterland. Others will argue for improving educational and health facilities. Such development spending would generate employment in construction and ancillary services, and hopefully promote sustained economic activity and growth. In a society where 60-70 percent of the population depends on smallholder agriculture for their livelihoods and 90 percent of the population in urban areas depends on the informal sector, such job-generating spending could be beneficial. But the money must be spent wisely and over a number of years if it is not to exacerbate inflation and exceed Ghana’s capacity to absorb the spending.

Ghana enters new era with oil field launch

TAKORADI, Ghana, December 15 – Ghana joined the ranks of Africa’s oil exporters on Wednesday, pledging to work to ensure lucrative new revenues further bolster one of the continent’s rising star economies.

John Atta Mills, the president of Ghana, wearing safety gear and blue overalls, opened the valves in a televised ceremony at the 330-metre-long floating platform some 40 miles (60 km) off the west African country’s Atlantic coast.

Initial production of around 120,000 barrels per day will rank Ghana as sub-Saharan Africa’s seventh largest producer, with output set to double within three years.

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.

“After a long wait, the day has come,” Mr Mills said.

“But … it means that we are assuming a very serious responsibility. And especially for those who are in leadership positions, we must ensure that it becomes a blessing not a curse,” he warned.

Aside from state-owned Ghana National Petroleum Corporation (GNPC), top players in Jubilee include UK-listed operator Tullow Oil, US producer Anadarko Petroleum and privately held US energy firm Kosmos.

The event underlines the importance of the Gulf of Guinea as a growing source of energy to consumers such as the US, where some see it supplying a quarter of US oil by 2015.

The region already counts Nigeria, Equatorial Guinea, Gabon and Congo Republic as exporters and others such as Liberia and Sierra Leone are hopeful of joining the club.

Ghana has taken advice in how to manage its oil sector from countries including Norway, and is anxious to avoid the strife and corruption which nearby Nigeria’s oil has brought.

“It will be a blessing because we are all jobless and poor,” said Brian Salmon, a 17-year-old small-holder in the western region coastal town of Takoradi.

“Normally when oil comes everybody is fighting to get their daily bread, but we Ghanaians have an understanding and will avoid conflict,” he added.

Ghana is the world’s second largest cocoa producer after neighbouring Ivory Coast and Africa’s number two gold miner. It has a $750m eurobond currently yielding about 6.4 per cent.

Ghana expects Jubilee’s oil and gas to help double its growth rate to more than 12 per cent next year, funding projects to boost infrastructure and laying the foundation for new industrial sectors. New data on Wednesday showed inflation running at 18-year lows.

Analysts say that while two decades of multi-party politics have led to a level of governance others in the volatile region can only dream of, Accra has dragged its heels on drafting the legal framework needed to manage the oil revenues.

Total revenue from oil into the 2011 budget is put at only 1.9 per cent of GDP. Although this is due to rise over the years, the initial impact on the economy is seen as modest.

Many are concerned a complex petroleum revenue management bill has yet to be voted by parliament and note the current draft allows 70 per cent of revenues to be used as collateral against loans, a possible incitement to excess borrowing.

“As a country we have a fairly terrible track record of hedging our commodities,” said Emmanuel Gyimah-Boadi of Ghana’s Centre for Democratic Development.

Ghana failed to tuck away proceeds from its assets in time to cushion it from a price slump in 2000, forcing it to seek $3.7bn debt relief two years later. Its budget deficit is set to finish 2010 just under 10 per cent of national output.

In a saga that unnerved some potential investors, Kosmos in August called off what sources close to the deal said was a $4bn pact to sell its stake to ExxonMobil after resistance from GNPC, which wants to raise its own holding.

Ghana Pumps First Official Oil

History was recorded yesterday in the Western Region when President Atta-Mills turned the valve on the FPSO Kwame Nkrumah to signify the beginning of the production of crude oil in commercial quantities in the Jubilee oil field.

It was a memorable occasion for all Ghanaians many who stayed glued to their TVs at home and work places to watch the programme live. The function itself took place at the Takoradi Air Force base and was graced by two former Presidents, Jerry John Rawlings and John Agyekum Kufuor as well as Ministers of State, members of the diplomatic corps, Members of Parliament, Chiefs and Ghanaians from all walks of life.

Also present were the jubilee partners; Tullow Oil plc, Anadarko, EO Group, Cosmos, Sabre and GNPC who are the shareholders of the Jubilee field.

At about 10 am, President Mills arrived on the FPSO in a helicopter and went through the safety briefing before being led by a Tullow official to the pipeline where he turned open the valve to open the pipes for the crude oil to gush through.

Ghana’s oil is the light sweet crude kind that is much sought after in the international market. The Jubilee Field will produce an initial 55,000 barrels of oil per day, but with the development of more wells, production is expected to hit 120,000 barrels per day.

The first export of oil will be in the first week of January 2011 to the United States of America and other European countries with the rest being used for domestic purposes. President John Evans Attah Mills, after turning open the valve, went ahead to interact with some Ghanaian engineers and doctors working in the vessel. Dr. Claudia Donkor and trainee engineers Emmanuel Kojo Dei and Francis Antwi were part of those the President interacted with. They expressed their joy at being part of the historic occasion.

Addressing a large gathering at the Takoradi Air Force base later on, President Mills paid glowing tributes to Former Presidents Rawlings and Kufuor for their immense contribution towards the production of crude oil in commercial quantities in Ghana.

He said former president Rawlings “clearly laid a massive foundation for what we are witnessing today. President John Agyekum Kufour continued from where President Rawlings left off. He also devoted attention to the oil.”

President Mills also paid special homage to Former GNPC boss, Tsatsu Tsikata under whose watch great strides were made towards the discovery of crude oil in commercial quantities in Ghana.

The President also applauded the efforts of the Jubilee partners in concluding Ghana’s odyssey to crude oil production in commercial quantities but reminded them on the need to respect all the agreements signed especially the fact that local content in the production process must be a priority.

Touching on the concerns raised by Chiefs in the Western Region about the need to use 10% of the oil revenue to develop the region, the President assured them that the region would be given priority.

“The Western Region where the oil and gas is located will be given the pride of place as far as development is concerned. Indeed there will be a massive development within the Western Region in the next few months,” he said.

With production beginning, Ghanaians are hoping that the under development that has been the lot of the country for years would soon be a thing of the past.

I spoke with Ghana. Everyone was watching on tv and feeling some pride. We are all watching with hope and trepidation in our hearts. In all too many cases we are watching with greed in our hearts as well. May we protect ourselves from the ill effects of our own greed and the immense greed from outside Ghana’s borders. And may all Ghanaians share and enjoy the benefits and positive opportunities the oil offers.

Oil Companies Impose Foreign Policy On Ghana

“Some of the oil companies operating in the Jubilee Field have taken an unprecedented step to control Ghana’s foreign policy and reduce the country to nothing more than an instrument of US hostility against other countries.

In a proposal to the Government of Ghana, the Companies are insisting that Ghana should automatically apply US sanctions against Iran, Cuba and Sudan.

Map of Ghana offshore oil fields including Jubilee and Dzata

The exact proposal is contained in the “Jubilee Field Unit Crude Oil Lifting Agreement” which is scheduled to be discussed in London next week.

It states that “All export tankers owned, technically managed or commercially operated by a company headquartered in, or flying flags of US sanctioned countries shall be automatically rejected.

“At present these countries are, Cuba, Iran and Sudan.

“TGL reserves the right to specify certain further flag states to be subject to this section 1.7 if they have been found not to comply with TGL vetting procedure.”

The proposal is calculated to undermine relations between Ghana and Cuba, Iran and Sudan and does not take account of the strategic interest of the people of Ghana.

Ghana has excellent relations with Iran which spans the fields of Health, Agriculture, Education and Culture.

Last month Iran gave Ghana a grant of US$1.5 million and tractors for the agricultural sector.

Iran has also established a University and a Clinic in Accra.

Every year, Cuba gives Ghana at least 200 health workers who keep the country’s health delivery system alive.

Cuban experts are also currently working on a malaria eradication project in Ghana and other West African States.

Over the last 30 years, Cuba has provided scholarships to thousands of Ghanaians to study in different fields.

If the Government of Ghana accepts these demands it will turn Ghana into a poodle of the US and undermine her credibility in the African Union and the Non-Aligned
Movement.”

Kwesi Pratt, The Insight Newspaper comments at GhanaWeb

Deja vu all over again

Differences over Ghana’s foreign policy caused the US to engineer and support the coup that overthrew Nkrumah.

What new kind of interference may we be looking at?

With whom is the US Africa Command partnering?

US Embassies are actively engaged in spying on African countries and citizens, collecting:

-- Biographic and biometric data, including health, opinions 
toward the US, training history, ethnicity (tribal and/or 
clan), and language skills of key and emerging political, 
military, intelligence, opposition, ethnic, religious, and 
business leaders.  Data should include email addresses, 
telephone and fax numbers, fingerprints, facial images, DNA, 
and iris scans.
09STATE37561

It seems like US foreign policy can be summed up with a line I heard in a cartoon this week: A friend is just an enemy who has not attacked yet.

Axim, western end of Cape Three Points from s e b on Flickr

There were stories yesterday and today on GhanaWeb about militant groups organizing in response to the oil drilling activity near Cape Three Points, Militant group emerges at Cape Three Point, and Militia reports on Cape Three Points are unnecessary fear mongering – Ablakwa.

Yesterday’s story, Militant group emerges at Cape Three Point, alleges:

A group calling itself The CAPE MILITIA has emerged as the militant group posing as the official mouthpiece of mostly unemployed youth of the area who believe a large chunk of the oil proceeds should be used to develop first, the oil find area before the larger Ghanaian society.

They also claim their action will be the only way to mitigate the likely environmental hazards and other forms of casualties that inhabitants of the oil find areas are likely to encounter when the oil drilling starts.

According to the leader (name withheld), they hold their daily meetings at Agona Nkwanta, where they engage in the training and the use of fire arms at a village near the Ghana Rubber Estates Plantation at Nkwanta.

The group leader disclosed that they have identified some pipelines under the seabed and will soon start attacking them and threatened to start targeting rig and non-oil facilities, like bridges, buildings belonging to oil companies in the area if they are not assured of equal e opportunities.

“We will give a fore-warning to avoid casualties as our intent is to only bring down a those symbols of oppression and injustice,” the rebel leader noted. “My brother this is the only way we can press home our demands: Western Region has suffered from decades of neglect, pollution, and underdevelopment,” he blurred out with a choked voice.

The group leader said their concerns are corroborated by evidence of destruction of fishing nets of fisher folks of the area and the pollution of their source of drinking water since preparation for the oil find began.

Indeed the leader also recalled how the recent dumping of drilled mud in the sea caused by operators of the Jubilee field has created lots of environmental problems for the people living along the coast.

A fisherman, Opanyin Mbere, was sure that his children had joined the group because they had seen and felt the atrocities meted out to them by the find of the Black Gold.

“Now when I go to sea I have no catch because all the fishes are attracted by the lights from the rigs; then we are told not to fish along the rigs, how should I feed my family, if the cause of my children can bring some hope, huh am in full support,” Opayin Mbere noted.

The first thing that strikes you on meeting members of CAPE MILITIA is the ease with which they communicate their problems and how they identify some probable solutions.

It was amazing, at least those elected to respond to questions, are articulate, well-educated, and conversant with the latest political developments at home and abroad.

There are a number of things that strike me as odd about this report. However it is true that the western region has not been reached by much development.

There was certainly not much about “probable solutions” in the article. The last two paragraphs seem somewhat at odds with the rest of the story. I don’t doubt the possibility of educated and articulate militants, it is just that the rest of the story does not seem to support this. If the supposed militants have such good ideas, it seems some ought to be mentioned as suggestions or examples. Many of the comments are interesting as well. Comments on GhanaWeb are not moderated. So there are always tedious insult wars going on, as well as timely and targeted opinions. You can mouseover the comments to get some sense of what is there.

The second article, Militia reports on Cape Three Points are unnecessary fear mongering – Ablakwa, is a refutation of the story in the first article:

A deputy Minister of Information says reports of Militia groups springing up in the oil rich Cape Three Points in the Western Region of Ghana are untrue and must be discarded.

Samuel Okudzeto Ablakwa told Joy News the reports are of no substance, adding “those who want to give credence to it just want to engage in unnecessary fear mongering.”

Residents in the area have been quick to dismiss the story but Security Analyst Dr. Kwesi Aning insists the situation could even be worse and have cautioned national security to be vigilant.

Speaking to Joy News’ Dzifa Bampoh the Deputy Information Minister Samuel Okudzeto Ablakwah says government has done enough checks and is convinced no such militia group exists in the Western Region.

He said government is rather guarding against circumstances that will engender people to lure the youth to take up arms in the oil rich area.

“At the end of the day what will make militias thrive or give people with evil intentions the opportunity to lure young persons and co-opt them to form militias as we have seen in other parts of the world is to what extent we are able to manage the oil resources so that everybody benefits including the people of the Western Region. That is our safest cure to all of [these] reports of insecurity,” he said.

Here again a number of comments to the article are interesting.

There is no question the Western Region has been neglected. And there is poverty there, and the devastating lack of opportunity that accompanies poverty. But this story sounds like fear mongering with underlying political motives as well. And the security expert quoted may have his own political agenda. The words of the Deputy Minister Samuel Okudzeto Ablakwa sound a bit more politically expedient than informed. But then Joy News is owned by a strong opposition party supporter. I don’t know anything about Today, the source of the first article. The story of the militants may be a fear mongering political ploy.

Ghana’s National Security Coordinator, Gbevlo Lartey, is a tough no nonsense guy, and I’d be interested to know what he has to say on any such matter as this before forming an opinion.

Both the environment and the people in the gold mining areas have been ruthlessly exploited, and so far as I know there are no reports of insurgent militants in those areas. You can see some of the exploitation of the environment and the neglect of local citizenry in this photoessay Ghana Gold Not Benefiting its people !

You can also view more images of Cape Three Points from the photo gallery of Trinity School.

The US Embassy in Accra refused a visa to the Ghana Minister of Energy in March and refused a visa for the Chairman of the GNPC, Ghana National Petroleum Commission, to visit the US.

US and Ghana are in a diplomatic row in which it appears … that the US government is consciously targeting some key government officials for standing in the way of American interests in Ghana.

[An official of GNPC] is reported to have told insiders that a consular officer at the US embassy told him that GNPC was “Anti- American”

Map of Ghana offshore oil fields including Jubilee and Dzata

Of course the job of the GNPC is to enable Ghana to make the best use of Ghana’s petroleum resources for the benefit of the Ghanaian people, not the American people. It is trying to correct some unethical deals involving Kosmos, the EO Group, and Exxon, that would have caused financial loss to Ghana. If the US acknowleges the sovereignty of sovereign nations, it needs to respect Ghana’s sovereignty. If the US does not respect Ghanaian sovereignty, and it appears that it does not, its motives and methods are a clear and obvious throwback to colonialism.

The US has a very bad record when it comes to undermining and destabilizing governments that are not doing what the US wants, or when they are perceived by some as standing in the way of American interests. In this case, as in most, it is American corporate interests. Exxon wanted to buy the Kosmos share of Ghana’s oil. This move by the US Embassy in denying visas to Ghanaians who are critical to the Ghana oil industry is very worrisome. In what other ways is the US Embassy working against the interests of the Ghanaian people and the current Ghanaian government? This is a grave and dangerous development.

Ghana is generally very pro American. But Ghanaians do not wish to be pushed around. And most Ghanaians are familiar with the fact that the US Embassy and the American CIA played a major role in the events leading to the overthrow of Nkrumah. The destructive ramifications of that action still reverberate throughout the continent. Ghana would not welcome this kind of interference again. I doubt other countries would look on it favorably.

In addition the US Africa Command has been very active and very controversial in Ghana. Most Ghanaians think that AFRICOM is in Ghana and in the rest of Africa to secure oil and other natural resources for the United States. Since that is the reason the command was created, there is some justification for this view. The US Africa Command maintains a local headquarters in the US Embassy in Accra, and is deeply involved in what it calls partnering with a variety of Ghanaian military activities.

You will find some more background on Kosmos and Ghana oil here, EO -Kosmos Rip-Off Exposed with a list of links bottom that provide more background and context .

While the Ghana National Petroleum Corporation (GNPC) toiled over the years in pursuit of a vision that others described as a mirage, their critics were quietly lining up to plunder ‘the spoils.’

As the controversy over how the E.O. Group a Ghanaian company, came by 3.5% carried interest in US-based Kosmos Energy’s initial 90% stake in the West Cape Three Points (WCTP) rages on, it has emerged that the Kufuor administration lowered the finishing tape for Kosmos Energy and EO Group at the expense of our beloved Ghana.

As part of its vision of ensuring that Ghana maximized its earnings from harnessing the country’s hydrocarbon potential, GNPC, since the 1980s, evolved a model petroleum agreement, which has served as a blue print for preparing petroleum agreements to license its blocks of oil fields to oil companies that came to explore for the ‘black gold’ in Ghana.

Whereas under previous petroleum agreements, royalties had been pegged between 10% – 12.5%, this was slashed to 5% under the Petroleum Agreement the Kufuor Government and GNPC signed with Kosmos Energy, and their E.O. partners. GNPC participation interest, a provision in petroleum agreements, which allows GNPC to acquire additional stake in the event of a commercial find, used to be 10%-15%, under previous petroleum agreements. However, this was also slashed down to 2.5%, under the petroleum agreement signed with Kosmos-E.O. Group, leaving it standing like a sore thumb, when matched against all other petroleum agreements, including those subsequently signed with other companies under the Kufuor regime.

The Managing Director of the Ghana National Petroleum Corporation (GNPC) Nana Boakye Asafu-Adjaye, has said the corporation’s decision to acquire the Kosmos Energy stake in the Jubilee Field, is necessary and critical to ensuring that Ghanaians derived the maximum benefits from the country’s oil resources. According to the GNPC boss, the state oil corporation, has already secured the necessary funding to acquire the stakes, and were in discussions with Kosmos Energy, who voluntarily decided to sell their stakes.

GNPC’s Chief Economic Evaluation and Monitoring Officer, Mr. Kwame Ntow Amoah … emphasized the need for GNPC to acquire the Kosmos Energy stake in Ghana’s oil fields and explained that apart from the 10% initial carried interest, GNPC has exercised its right of acquiring additional interests in the Jubilee field. He explained that apart from these, royalties and income tax earnings from the oil sale would leave the nation with over 50% of the profits from the oil.

This is a much better deal for Ghana.

Here is the full article about the denial of US visas to Ghanian officials.

US & Ghana In Diplomatic Row

…Energy Minister & Atto Ahwoi denied visa.
..Govt. Fingers oil Politics

There is a growing nerve racking diplomat anxiety between some top ranks of the Ghana government towards the US Embassy in Accra, resulting in suspicion that the US government is consciously targeting some key government officials for standing in the way of American interest in Ghana.

On the controversy scale, the row has reached almost showdown levels, with some key government officials threatening to boycott travels to the US.

There are serious murmurings within the corridors of the Ministry of Energy and GNPC that their insistence on exercising their right of first purchase of the oil interest of Kosmos Energy as against the company’s attempt to sell it’s oil interest to a fellow American company -Exxon Mobil (albeit through the backdoor) appears to have angered the US Embassy who are allegedly employing “embarrassing” diplomatic retaliatory tools targeted at key personalities in the energy sector.

According to The Enquirer’s deep throat sources, The Minister of Energy, Dr. Oteng Adjei, who was leading a government delegation to the USA to attend a meeting with Blackstone and Warburg Pincus the financiers of Kosmos Energy was on March 27th, this year denied visa.

The Energy Minister had applied for the visa with his diplomatic passport. Sources say, the embassy’s actions angered Osu Castle, the seat of Ghana’s Presidency, and that it took the personal intervention of the usually quiet and genteel Chief of Staff of Henry Martey Newman to secure a travelling visa for the Minister.

On May 7th, 2010, Mr. Atto Ahwoi, Board Chairman of the Ghana National Petroleum Corporation (GNPC), who returned from the USA last March, was refused visa by the embassy. Mr. Ahwoi has travelled to the US about 20 times and attended Harvard University in the United States, so many years ago.

When The Enquirer contacted Mr. Ahwoi, he confirmed that the embassy had refused him a Non Immigrant Visa and expressed his surprise at what he called the surprising attitude of the embassy to certain key government people.

When he was asked the reason for the refusal, he read out a letter given to him and signed by an unnamed consular officer which among other things stated that: “You have been temporally refused a visa under INA Section 221G, as you lack certain documents or information needed to reach a decision in your case. For further instructions please refer to the Checked Box below” he read out.

He continued that the checked box read “We need to verify certain documents you have given us or statements you have made. We will contact you at the telephone numbers you provided us as soon as investigations are completed. There is nothing else you need to do at this stage”

When asked whether he shared sentiments that his refusal had anything to with his position on the Kosmos-Energy deal, he said that could be the only reason. “This is about the 20th time I have been to the US, I schooled in the US, I attended Harvard University, At my age, I will not be migrating to the US, why this sudden change” he said.

Early this year, a top officer of GNPC working within the Human Resource Department was also refused travelling visa whilst attempting to travel to US on official assignment.

The official is reported to have told insiders that a consular officer at the US embassy told him that GNPC was “Anti- American”

US EMBASSY RESPONDS

When The Enquirer contacted the US Embassy for comments, Mr. Benjamin East, Information Officer stated that the embassy had no comments to all the issues raised above.

In a telephone and email response the embassy said “The response at bottom applies to the three parts of your question, as I understand it, ie:

1. That the Embassy refused a visa to the Minister of Energy in March, which was issued eventually due to intervention by the Chief of Staff.

2. That the Embassy refused a visa for the Chairman of the GNPC.

3. That the visa cases cited above are a response by the U.S. Government to recent actions/decisions taken with regards to Kosmos’ sale of its Jubilee stake to Exxon”.

RESPONSE:

“U.S. law prohibits the Embassy from commenting on individual visa cases.” Mr. Ahwoi, told The Enquirer that “I have decided I wont go there again, any American who wants to do business with us, must come here”

Ghana’s Western neighbor Ivory Coast is reportedly laying claims to portions of the huge oil wealth in the deep waters of the Western Region.

Map with Dzata oil field and Jubilee field off Cape Three Points Ghana (click to enlarge)

In a move to save the situation, Ghana has begun an urgent move to pass a new law that seeks to establish the Ghana Boundary Commission to undertake negotiations to determine and demarcate Ghana’s land boundaries and de-limit Ghana’s maritime boundaries.

The news of Ivory Coast’s claim to parts of Ghana’s oil fields comes just days after United States operator Vanco struck oil in the deep-water Dzata-1 well, off Ghana’s Cape Three Points near Ivory Coast, further boosting the oil wealth in Ghana’s booming offshore Tano basin.
However the Hon Collins Dauda said he is confident Ghana and Ivory Coast will be able to resolve the matter without any conflict due to the good relations between the two countries. (GhanaWeb)

I surely hope the Hon. Collins Dauda is correct.

[UPDATE: Added March 5, from MyJoyOnline, see below for the rest of the article
Ivorian authorities are only calling for a negotiation of the maritime border between the two countries.]

The Vanguard tells us:

Industry sources say the crude found off Ghana is of a quality even easier to refine than the light, sweet crude found in Nigeria, one of the world’s largest oil producers.

Revenue derived from oil will be invested in the national power supply, with improvements to the road network and water supply, construction of a deep sea oil port and revamping railway lines, Atta-Mills said.

“These projects will not only create significant employment themselves but will also support the growth of other industries,” he told the parliamentarians

My Joy Online has a bit more detail on the dispute:

Head of Research at the Kofi Annan International Peace-Keeping Training Centre, Dr Kwesi Aning, says Ivory Coast’s claim to portions of Ghana’s oil fields exemplifies “a failure of the state institutions to protect our national interest.”

Dr Aning said there is a general lack of seriousness in ensuring the country’s boundaries are protected.

Ivory Coast has sent the government of Ghana a correspondence expressing outright disrespect for an existing “median line” that divides the two countries.

The Francophone country consequently served the United Nations with a similar correspondence saying it does not respect a temporary boundary between the two countries.

The Ghana Government is expecting Parliament to quickly deliberate on a bill that would establish a boundary commission to negotiate Ghana’s maritime boundaries with Ivory Coast.

The Ghana Boundaries Commission Bill has been sent to Parliament under a certificate of urgency, Lands and Natural Resources Minister Collins Dauda told the Super Morning Show on Thursday.

“A national boundaries commission will be put in place that would engage our neighbours in La Cote d’Ivoire with a view of negotiating our maritime boundary between ourselves and our brothers in Ivory Coast,” he said.

Dr Aning said the bill must be given a strong bi-partisan urgency to ensure that the country derives the most out of its oil resource.

The security expert is also recommending a solid technical documentation studied by lawyers with expertise on petroleum matters.

Diplomatic implications

The Lands and Natural Resources Minister says the emerging claim from Ivory Coast for portions of the oil fields in the Western Region is a very delicate matter.

Collins Dauda said the issue has serious international and diplomatic repercussions.

“We have not been able, as a country, to determine our boundary with Ivory Coast and there is the need for us to now determine the maritime boundary between Ghana and Ivory Coast,” he said.

Mr Dauda however said both countries have, for years, respected “a median line” between them that cannot be trespassed.

“All of a sudden, with the oil find, Ivory Coast is making a claim that is disrespecting this median line we have all respected. In which case we would be affected or the oil find will be affected,” he said.

Baseless claim

The Lands and Natural Resources Minister said the claim by Ivory Coast is baseless.

This, according to him, is because the claim by the Francophone country is rather parallel to certain internationally acceptable standards of determining maritime boundaries.”

Collins Dauda said, last year, Ghana appealed to the United Nations to extend its maritime boundary by 200 nautical miles.

As a precondition, the UN directed the country to negotiate boundaries with its neighbours, he disclosed.

Disrespect for ‘median line’

The latest turn of events may even be more surprising as Ivory Coast has already sent a correspondence to the Republic of Ghana, expressing disrespect for the median line the two countries have agreed upon for years.

Consequently, Ivory Coast has made a submission to the United Nations laying claim to portions of the Ghana’s oil find.

Drilling on the Dzata-1 well began almost a year ago, the map and photo, above and below, accompany this article from April 2009:

ACCRA, Ghana–(BUSINESS WIRE)–The Government of the Republic of Ghana, the Ghana National Petroleum Corporation (GNPC), Vanco Ghana Ltd. and LUKOIL Overseas Ghana Ltd., signed a new Petroleum Agreement, covering the Cape Three Points Deepwater block. This agreement will replace the existing Petroleum Agreement which expires at the end of April 2009. The new agreement provides Vanco and LUKOIL with the opportunity to continue the exploration of the area, during which new 3D seismic and additional drilling activities are planned. The new agreement also provides GNPC and the government of Ghana with significant commercial benefits, including higher royalty and increased GNPC participation. The new Petroleum Agreement also gives ownership of Associated Gas to the State.

The Aban Abraham drillship mobilized to Ghana to drill the Dzata Prospect. (Photo: Business Wire)

The Cape Three Points Deepwater block encompasses an area of 5,146 square kilometers in water depths ranging from 200 to 3,000 meters in the Tano Basin. Vanco (Operator) holds a 28.34% participating interest in the Cape Three Points Deepwater block with LUKOIL holding a 56.66% participating interest. GNPC, the state oil company, holds a 15% carried interest, with the option to acquire up to an additional 5% in any commercial discovery.

The new agreement comes as the Aban Abraham deepwater drillship departs Cape Town, South Africa after completing final retrofit operations to enable the unit to drill in water depths of up to 2,000 meters. The Aban Abraham will mobilize to Ghana to commence the Dzata-1 exploratory well by the end of April 2009.

Situated in 1,874 meters (6,148 feet) water depth, the Dzata Prospect is a large anticlinal structure with numerous Upper and Lower Cretaceous potential reservoir horizons and distinct direct hydrocarbon indicators, including flat spots and a “gas chimney.” The well will be drilled to a total depth of approximately 4,786 meters, or 2,912 meters below the mud line.

“The Aban Abraham drilling unit is finally ready to drill this exciting prospect where we are hopeful of a significant discovery,” says Vanco President, Gene Van Dyke. “Vanco and LUKOIL appreciate the assistance and support of GNPC and the Ministry of Energy in completing the new Petroleum Agreement which will allow the partnership to continue the aggressive exploration of the Cape Three Points Deep Water block.”

Vanco is a leading deepwater independent with activity in Côte d’Ivoire, Ghana, Equatorial Guinea and the Ukrainian Black Sea.

——–

Added March 5:

Dzata 1 oil well is within Ghana’s boundary – Vanco Oil

The Chief Operating Officer of Vanco Limited, J.L Mitchell, operators of the Dzata- 1 Well, located offshore Ghana, in the Tano basin of the Cape three points Deep Water Block, has told Citi News that their block is well within the maritime boundaries of Ghana.

According to him, Vanco has no concern at all over reports that neighboring Ivory Coast is making claims for some parts of Ghana’s maritime Boundary.

The Dzata 1 discovery is the latest in addition to the Jubilee and other oilfields where significant hydrocarbons have been found.

There are speculations that the Dzata 1 discovery which is close to the Ivory Coast boundary may be a contributory factor to Cote D’Ivoire’s claims.

But Mr Mitchell told Citi News from his base in the US that that may not be the case since the Dzata Well is over 200 kilometers away from Ghana’s maritime boundary with cote-d’Ivoire.

“It’s very far; 200 kilometres away from the maritime boundaries and it doesn’t affect us one way or the other…It is well within the Ghanaian maritime boundary,” he said.

Meanwhile, Security Analyst Dr Kwesi Aning says Ghana must take a firm stance as it seeks to enter negotiations with the Ivorians and desist from using the humanitarian approach.

“More often than not, when these problems arise, there is a certain naivety on the Ghanaian side, a certain humanitarian approach, saying we are all brothers and all that – we are not brothers”.

“The Ivorians have a rationale choice attitude to this, they have made their calculations and they are willing to push this demand as far as possible to get what they want and I think it’s crucial that this bill is passed under the certificate of urgency and hopefully, the team that will be put together should be a bi-partisan group of technical experts with the requisite knowledge to ensure that this issue does not become a problem.” He told Citi FM.

He hinted that the Ivorians are better structured and coordinated; making them miles ahead of Ghana as far as the struggle for the demarcation is concerned

He, therefore, advised Government to ensure the passage of the law immediately and provide the requisite resources for a bi-partisan group to promote Ghana’s interest in the matter.

Dr Aning warned that if the right steps are not taken to deal with the situation immediately, Ghana and Ivory Coast may replicate the conflict that ensued between Nigeria and Cameroun over the Bakassi peninsula.

France may support Ivory Coast in Dzata oil debacle – Fellow
By Citifmonline.com | Fri 05th March, 2010 12:55 GMT

A Fellow at the Legon Centre for International Affairs, Dr Ken Ahorsu says the current scramble between Ghana and its neighbor Ivory Coast over the Dzata oil well is not irresolvable.

He has warned however that the French Government could support Ivory Coast against Ghana in the eventuality that the issue blows up beyond the sub-region.

He says the situation could be handled satisfactorily to avert a repeat of the Bakassi Peninsula incident as pertained between Cameroon and Nigeria.

Dr Ahorsu told Citi News that the African Union must first come into the fray before the matter is taken to other international platforms if possible. Ivory Coast has already made a complaint to the UN laying claim to the Dzata well discovered by Vanco oil recently in the Cape Three point fields.

“Ghana really has to do its home work because the Francophone countries have a very firm supporter in France. If you follow the court ruling of the Bakassi Penninsula between Nigeria and Cameroon, internationally everybody believed that France had a huge role to play that influenced the final outcome.

“I don’t want to suspect but I have this uneasy feeling that Ivory Coast might have started stirring the International waters, given the knowledge that they believe they have a supporter in the International system but…I have looked at it from the internet, I have looked at where the new oil is found by Vanco and I don’t think it’s within Ivorian waters.” He said.

According to him, the Government of Ghana has done the right thing by putting together a Border Commission to deal with the issue. Dr Ahorsu believes delimitation of the maritime boundaries between the two countries should not be a difficult task to carry out.

Vanco Ghana dismisses threat to Ghana’s find
Story by Fiifi Koomson/Myjoyonline.com/Ghana

Petroleum exploration firm, Vanco Ghana Limited, has dismissed suggestions that its oil field in the Western Region is at the centre of a possible boundary dispute between Ghana and the Ivory Coast.

The company says its oilfield, known as Gyata 1, is so far away from the maritime boundary between the two countries that it cannot be the subject of any dispute.

Country manger of Vanco Limited, Kofi Afenu, says the Ivorian authorities are only seeking negotiations with Ghana over the Jubilee oilfield, which is owned by Kosmos.

Several miles away

“The distance between the boundary line and then the Gyata 1 well is more than 200 miles…quite far,” Mr Afenu told Joy News’ Sammy Darko.

The Vanco country manager is amazed at news making the rounds in some sections of the media that Ivorian authorities are demanding portions of Ghana’s oilfield.

According to him, the closest well to the Ivorian border is the Jubilee field which is some 60 miles away.

Under no circumstance will Ivory Coast lay claim to the Gyata 1 well which is several miles away, Mr Afenu indicated.

Confusion

The media may have blown the issue out of proportion or perhaps the minister sent the wrong impression to Ghanaians that Ivory Coast is demanding a portion of Ghana’s oil fields.

The facts as discovered by the Myjoyonline.com indicate the Ivorian authorities are only calling for a negotiation of the maritime border between the two countries.

La Cote d’Ivoire has not laid claim to any portion of Ghana’s maritime space, authorities indicate.

Meanwhile, Parliament is expected to quickly deliberate on a bill that would establish a boundary commission to negotiate Ghana’s maritime boundaries with Ivory Coast and other neighbouring countries.

The Ghana Boundaries Commission Bill has been sent to Parliament under a certificate of urgency, Lands and Natural Resources Minister Collins Dauda has said.

“A National Boundaries Commission will be put in place that would engage our neighbours in La Cote d’Ivoire with a view of negotiating our maritime boundary between ourselves and our brothers in Ivory Coast,” Mr Dauda said.

A map of the area in contention shows no part of Ghana’s oil field is in danger of a seizure.

The International Institute for ICT Journalism created a blog for following news of oil finds, oil wealth, and the oil industry in Ghana:
Reporting Oil and Gas


FPSO, Floating Production Storage and Offloading vessel for the Jubilee Field and sub sea FPSO production facilities diagram from a presentation at Kosmos Energy

For awhile there was not much published, but in the last couple of months there have been new stories posted almost daily, sometimes several times per day. Many of these stories are taken from various media in Ghana. That makes Reporting Oil and Gas a very useful tool for collecting and following the stories on oil development in Ghana. At the end of each story the blog provides the link to the original source. This news blog is still in its early stages, but I hope it continues and expands. It is quite useful and much needed.

On February 1 it reported that Ghana is considering setting up a sovereign wealth fund for oil revenues.
Ghana Eyes Sovereign Wealth Find For Oil Morey -Minister

Ghana is considering setting up a sovereign wealth fund to channel surplus revenues from oil production, which are due to start rolling later this year, Finance Minister Kwabena Duffuor has said.

“We have held a couple of meetings already it’s something we’ re seriously working towards and we hope to put the proposals before Cabinet in about a month,” Dr. Duffuor said in an interview with Reuters.

He said if Cabinet backs the proposals, a bill will then be drafted for consideration by parliament, Duffuor said.

The Finance Minister gave no details of the size of the possible fund. But a Ghanaian government source close to discussions on the matter said it will be largely shaped by the size of oil revenues.

The source noted that it was not certain that the fund would be given the green light, noting an alternative option-investing in key domestic infrastructure project was also under discussion.

Ghana is the latest Africa state, alongside Nigeria, Angola and Tunisia to study ways to ring fence energy windfalls for future generations.

Ghana, the world’s number two cocoa producer and Africa’s second –biggest gold miner after South Africa expects to starts oil production late this year when its offshore Jubilee energy field starts operation.

And Is “Oil Fund” all Ghana needs to defeat the Resource Curse? by Stephen Yeboah from the Department of Planning, Kwame Nkrumah University of Science and Technology

The case for the economic and political significance of oil funds remains very bleak. It is now argued by some economists that oil funds are no more effective than other measures for mitigating the threats of Dutch Disease.

… the country needs accountability, openness and transparency to defeat the resource. And what makes these three pillars meaningful in any democratic dispensation? Ghana ought to rejuvenate its institutions and governance structures to solve the paradox of plenty.

Most importantly, regulatory and legal framework in the oil and gas sector and in managing the oil fund should be made operational. Would Ghana have the capacity to enforce the laws that would govern the oil industry?

The statement by the Deputy Minister of Energy, Emmanuel Armah-Kofi Buah, that the Ministry of Energy would oversee the disbursement of funds in the “Oil and Gas Business Development and Local Content Fund” leaves much to be desired. Here, it is definitely the adherence to the political disincentives in the country where virtually the executive wields leverage even over parliament. This situation would allow public spending for personal gains. Ideally, the role to oversee and monitor the disbursement of funds should solely be assigned to an independent oversight body and parliament respectively. Parliament should exercise the authority of debating, approving and scrutinizing petroleum agreements, government transactions in and out of the oil fund.

Concerning the role of civil society organizations, there is a seemingly brighter step since Ghana is blessed with vibrant groups that are always in place to have a say in government decisions. But in the context of the oil sector, are civil society groups empowered enough to meet the difficult challenges ahead? It is worthy of note that an oil fund with small number of actors operating in nontransparent and poorly linked manner would encourage misappropriation and abuse of power. The outcome of the issue here is that limited roles of CSOs mean that the tool for ensuring transparency and openness in the oil sector is made ineffective. The Extractive Industries Transparency Initiative (EITI) is the best medium that can enjoin the role many actors, from government representative to civil society organizations.

Again, what is always significant is for the ordinary Ghanaian to be educated and made informed of what goes on in the oil and gas sector. This is to clamp down on possible uncontrolled grievances that may cause revolts.

The latest stories as of today are dated February 4th.
World Bank gives Ghana $30m for capacity building for oil and gas industry

The World Bank in a programme is giving the country an amount of $30 million for training to build capacity for the industry.

Diwan said the Bank was embarking on an “ambitious programme to train Ghanaians in the universities, financial institutions, for taxation and management” to prepare the country to be in a position to manage the oil resources.

This development has given hope to many observers who believe that the discussions are an opportunity to lead the country to develop a sound plan on how to manage the oil and to avoid the problems that many oil-rich African countries are going through presently.

I doubt any plan of the World Bank will help avoid the oil curse. The pattern of the World Bank and the IMF is to tear down any responsible government institutions with structural adjustment programs, leaving countries at the mercy of predatory global capitalism, without any institutional defense system. This is largely the point of structural adjustment programs. Ghana has already suffered and continues to suffer from loss of personel in the public sector due to structural adjustments, preventing the government from carrying out its responsibilities to the people of Ghana.

Reporting Oil and Gas is very simple in design and only puts two or three stories on a page. This is smart design, as it makes it much more useful in Ghana where there are not so many high speed connections to the internet. And Ghana is where this information is really needed.

The other story on the front page today is Investment conference in Ghana in March

International Business Event Management Ghana Limited, in collaboration with the Ghana Investment Promotion Centre (GIPC) and other stakeholders, is to host a multi-sectoral conference in March, this year, for potential investors to the Ghanaian business terrain.

The conference, dubbed: “Investing and Growing Your Business in Ghana- Challenges and Opportunities (IGB-Ghana 2010), follows the launch of the International Business Event Management Ghana Limited (IBEM-Gh. Ltd) on January 13, this year, in Lagos

“IGB Ghana 2010 conference will not only present a unique business networking opportunity for participants but would also provide the opportunity to meet and deliberate with service providers, government regulators, development partners, law firms, government agencies, ministries, Ghana Chamber of commerce and financial institutions,” he stated.

Mr. Ampah said:” the conference is bringing together manufacturers from Africa, Europe, Asia, and thee United States, adding that regional and multi-national corporate bodies, gas companies, embassies, banks and financial institutions as well as private sector operators would participate in the conference.”

Shedding some light on the launching event in Lagos, Mr. Ampah said many investors expressed their interest in investing in Ghana but expressed the need for regular power supply to avoid disruptions in their operations.

Irregular power supply is a huge handicap to businesses in Ghana, and to doing business in Ghana. It can make many activities and transactions impossible. It would be nice to see some progress to solving the problem.

There is one thing I hope Reporting Oil and Gas adds to their stories, and that is the name of the original author, if it is available. They do link to the original story, so it is possible to find who wrote a story if the author is named, but it would be nice to bring that information into the stories at Reporting Oil and Gas. Nevertheless Reporting Oil and Gas performs a valuable service well, and I recommend it to your attention.

________

Added February 10:

Subsea Equipment Ready For Oil Production

The subsea equipment required for the production of oil from the Jubilee Oil Fields off the coast of Ghana in the Western region, have begun arriving in the country.

A statement issued in Accra and signed by the Communications Manager of Tullow Ghana Limited, Mr. Gayheart Mensah, said, “this is a strong indication that the operator of the Jubilee Field, Tullow Ghana Limited, is ready to produce first oil from the Jubilee Field by the last quarter of this year.”

An equipment known as “The Christmas Tree,” which is an assembly of control valves, gauges, pipes, chokes and fittings and which is installed on the ocean floor, is used to control oil and gas flow from a completed well.

The statement said that the Sekondi Naval Base and the Takoradi Port have been the main entry points for the equipment, adding that before the vessels carrying the equipment set sail for Ghana, a team from Tullow Ghana Limited visited some of the companies contracted by the Jubilee Partners to manufacture subsea structures for the project.

According to the statement, the oil discovery in the Jubilee Oil Fields has come with “expectations among Ghanaians that the oil find should transform Ghana’s economy and spin off jobs immediately. These are huge expectations that need to be managed.”

The statement is confident, “with the level of technology deployed by Tullow Ghana Limited, the operator of the Jubilee Oil Fields and the quality of personnel working on the project, the target date of producing first oil by the last quarter of this year will be met.”

no country has been developed by outsiders. International relationships are simply not defined by sentimentalities but by cold, calculated self-interest. This is a lesson that African leaders refuse to learn. Outsiders might help, but it is the citizens of a country led by an intelligent leader with vision that develop nations.
Femi Akomolafe

Map of Ghana's Jubilee Field

Back in December the Vanguard published an editorial recording a conversation between Professor Dora Akunyili, Minister of Information for Nigeria, and Venezuela’s Ambassador to Nigeria, Enerique Fernando Arrundell. There is much in Mr. Arrundell’s words that Ghanaians should take to heart.

Lessons from Venezuela
Dec. 4, 2009

VENEZUELAN Ambassador to Nigeria, Enerique Fernando Arrundell, could not have offered his advice on Nigeria’s management of its petroleum resources at a better time. The anchor of government’s argument is that higher prices would draw foreign investors to the down stream sector of the industry.

Professor Dora Akunyili, Minister of Information had solicited Venezuelan investments for our refineries.
Mr. Arrundell’s response was without diplomatese. He launched a profound lecture on Nigeria’s oil and gas.

“In Venezuela, since 1999, we’ve never had a raise in fuel price. We only pay $1.02 to fill the tank. What I pay for with N12, 000 here (Nigeria), in Venezuela I’ll pay N400. What is happening is simple. Our President (Hugo Chavez) decided one day to control the industry, because it belongs to Venezuelans. If you don’t control the industry, your development will be in the hands of foreigners.

“You have to have your own country. The oil is your country’s. Sorry I am telling you this. I am giving you the experience of Venezuela. We have 12 refineries in the United States, 18,000 gas stations in the West Coast. All we are doing is in the hands of Venezuelans.

“Before 1999, we had three or four foreign companies working with us. That time they were taking 80 per cent, and giving us 20. Now, we have 90 per cent, and giving them 10. But now, we have 22 countries working with us in that condition.

It is the Venezuelan condition. You know why? It is because 60 per cent of the income goes to social programmes. That’s why we have 22,000 medical doctors assisting the people in the community. The people don’t go to the hospital; doctors go to their houses. This is because the money is handled by Venezuelans. How come

Nigeria that has more technical manpower than Venezuela, with 150 million people, and very intellectual people all around, not been able to get it right? The question is: If you are not handling your resources, how are you going to handle the country?

“So, it is important that Nigeria takes control of her resources. We have no illiterate people. We have over 17 new universities totally free. I graduated from the university without paying one cent, and take three meals every day, because we have the resources. We want the resources of the Nigerian people for the
Nigerians. It is enough! It is enough, Minister!

Femi Akomolafe (his blog) adds some words of advice:

There are, however, some fundamental truths that we must begin to tell ourselves. First and foremost is the belief that we can continue to depend on other people’s (especially Western) charities for our development. I have said several times that no country has been developed by outsiders. International relationships are simply not defined by sentimentalities but by cold, calculated self-interest. This is a lesson that African leaders refuse to learn. Outsiders might help, but it is the citizens of a country led by an intelligent leader with vision that develop nations.

And as I have recounted several times in this very column, our five hundred or so years of “relationship” with the West has been to our utter detriment. We have nothing but slavery, colonialism, and the more pernicious neo-colonialism (aka imperialism) to show for it. We can also throw in the disease of rabid racism that still pervades the Western world.

And yet African leaders continue to parrot the same inanities about partnering with “developmental partners!”

In Ghana:

In the name of “investment,” the Western multinationals will bring in ancient equipment (tax free) to come and set up shop to extract our resources. To attract their “investments,” they are given tax breaks and other packages that made them pay their expatriate staff out-of-this-world salaries and emoluments. They will employ the brute force of our compatriots whilst their planes and helicopters are waiting to ship out our gold and diamonds in their raw state. For this they pay us a pittance in royalty and employ the best PR outfits who will dazzle us with enough razzmatazz to make us dizzy. A few years down the road, the mines are depleted, our land and environment polluted, and our people’s lives wretched. The wily Westerner is already outta the country.

This is the very sad story that keeps repeating itself year in year out and like mindless children, we seem not to learn any lesson. Since the overthrow of President Kwame Nkrumah’s government in 1966, no government in Ghana has deemed it fit and proper to build a gold or diamond factory in order to add some value to them.

This has been our sad story and yet our leaders have stubbornly refused to learn a thing.

There is a law in this country against causing financial loss to the state and it is high time we start to use it seriously and effectively. How on earth can officials of our country, paid from the treasury of mother Ghana, and in this age and time, sign agreements with foreigners to cart away our crude oil unrefined for twenty years! What on earth informed that reckless decision? Who said that slavery is over? And please, what crime is that if not the criminal cause of financial loss to the state of Ghana?

There is a state-owned oil refinery at Tema that is in perennial struggle to get crude oil from Nigeria, and yet some unconscionable Ghanaians appended their signature to ship our oil to foreign refineries unrefined!

Tsatsu Tsikata and George Owusu have been extraordinarily influential in guiding and developing the quest for oil in Ghana.

Oil rig from GhanaWeb photo archive

I recently came across articles that praise each of them and will copy both complete articles below.Both are puff pieces in that they speak only to the good in their subjects, and address none of the questionable issues. There is much more to the stories of both men. Most of the published information about either man is heavily slanted by political opinion. So one has to read a great many stories, and then try to read between the lines and sort out what looks like the truth. Nevertheless, despite obvious bias, both articles below are interesting and informative.

I am fairly certain Ghana’s current oil finds were enabled by the fact that the technology now exists for deep water drilling, and the price of oil makes deep water wells economically practical. Without those two features in place, credit or blame for Ghana producing oil or not are somewhat irrelevant.

The Kufuor NPP government spent 6 years trying to put Tsatsu Tsikata in jail. They finally did near the end of their term, but he has since been released.

More recently George Owusu has encountered difficulties with the current NDC government. I am not certain about the accuracy of the information in the linked story about Kosmos’ share, dated Nov. 16. It presents a rather interesting picture of what has been happening regarding the Ghana government, Kosmos, Exxon and the Chinese.

Herewith, the two profile articles describing these giants of Ghana oil:

Oil find in Ghana – Sam Jonah Praises GNPC
16 September 2009
Sam Jonah

I have followed with keen interest the news of a commercial oil find in Ghana and the optimism that it has engendered in the country.

There is a welcome buoyancy in the mood of many Ghanaians as they look forward to being an oil-producing country.

There are many people and institutions that deserve credit for the oil find — members of staff of the GNPC through to its present staff and of course to the public that patiently supported the difficult, protracted but unavoidable exploration effort.

There is indeed enough credit to go round.

I cannot therefore help being disappointed that amidst all the celebrations, no mention is made of the pioneering role of Tsatsu Tsikata.

When I compare the exciting prospects generated by the discovery with the state of affairs 20-odd years ago, I am reminded of the contrast between the situation of the mining sector before and after the implementation of the reforms of the mid-1980s.

I first joined the board of the Minerals Commission in September 1984. At that time, the mining sector was in a parlous state.

As a result of the work done by a few dedicated people under the leadership of Kofi Ansah, the sector was completely transformed in less than a decade.

In the mining sector, we at least had the benefit of over 100 years of mining and considerable technical expertise.

The oil sector in the early 1980s did not enjoy any such stature. I recall the scepticism with which prospects of Ghana finding oil in commercial quantities was greeted at the time.

I remember in 1985, while on a trip to the U.S., asking a chief executive of one of the major oil companies why they were not showing interest in searching for oil in Ghana.

His response was that their geophysicists had told them that our geological structures were too tight and too badly faulted to host significant reservoirs.

Today, we know just how wrong those geophysicists were. One man who defied the prevailing scepticism of the time and, with a persistence bordering on stubbornness, led the efforts to get us where we are today, is Tsatsu Tsikata.

Indeed, when I shared with him, shortly after it was made, the observation by the chief executive of the oil major, Tsatsu’s response was: “Let’s all wait and see”.

Tsatsu led in the rethinking of petroleum sector policy. He led in crafting the petroleum (Exploration and Production) law that was the “investment code” for the oil sector.

He led in drafting model exploration agreements including fiscal regime and Accounting Guide that is still state-of-the-art 20 years later.

He led in the development of a specific Petroleum Income Tax Law.

Beyond this intellectual and professional contribution Tsatsu emerged as a corporate leader — building GNPC itself from the ground up.

His vision was sufficiently infectious to attract even hard-nosed oil men to work on Ghana’s potential, often with very little reward.

However, it is in his identification, recruitment and promotion of local talent that Tsatsu truly excelled.

He was truly passionate about building the capacity of Ghanaian professionals in the sector.

Companies and government’s that had dealings with GNPC were pressured into funding scholarships and providing or funding attachments for GNPC staff and even staff from related MDAs.

Tsatsu foresaw that this investment would in its own way be as valuable to Ghana as any oil find. And history has proved him right.

Today, even before the first oil has flowed, Ghana has a solid cadre of industry professionals ready, given the opportunity, to lead us into the next phase of oil industry development.

We have seasoned exploration geologists and geophysicists, drilling engineers, field development engineers.

We have specialised market and financial analysts and lawyers. In the late 1980s GNPC was already developing boat and helicopter services expertise for production operations. In the 1980s (20 years before the West African Gas Pipeline and before climate change became a global preoccupation), GNPC was training staff in the economics and management of natural gas.

Tsatsu was relentless, even obsessive, about the meticulous exploration of Ghana’s oil potential.

He recognised that geological and geophysical data were essential preconditions for any serious effort to attract private capital into exploration efforts.

He thus focused GNPC’s meagre resources on an ambitious data project.

GNPC scoured corporate and public archives around the world collecting geological and seismic materials, data and analysts from earlier exploration efforts.

GNPC then constructed the most complete database of seismic information about Ghana anywhere in the world.

Then through a joint venture with the Norwegian state oil company, GNPC seismologists began to reprocess and re-analyse this data using new technology. Tsatsu did not stop with old data.

He worked with state oil companies from Canada (Petro-Canada International), Norway (Statoil) and Brazil (Petrobras) and Nigeria (NNPC’s seismic subsidiary) to acquire new data.

Through these bilateral arrangements GNPC staff became familiar with modern technology such as “3-D” seismic surveys.

Eventually, Tsatsu persuaded these collaborators to support GNPC’s acquisition of the expensive computer technology to enable her Ghanaian explorationists to undertake much of this analysis in Ghana.

This in turn provided a platform for a massive upgrade of GNPC’s computer technology with positive impacts on all other sectors of its work and with distinct benefits for example for Kwame Nkrumah University of Science and Technology.

It was the availability of this extensive database and the challenging analyses of old data by Ghanaian geophysicists working under Tsatsu that made Ghana such an attractive exploration destination in the mid-’80s despite earlier scepticism.

It was the ceaseless interpretation and re-interpretation of the GNPC’s growing geological and geophysical database inspired by and supervised by Tsatsu that identified many new prospects.

Tsatsu literally set the course of Ghana’s exploration drilling for an entire generation. Those who worked with him in the sector are in a better position than I to give further details.

But I saw enough to be able to say that his investment in institution building and in exploration have contributed immensely to the recent discoveries at Cape Three Points.

For the health of our nation, for the sake of posterity and the development of a culture that recognises selfless and dedicated service, we must all acknowledge the immense contribution that Tsatsu made to the development of the petroleum sector.

It is not too late to do so.

* * *

History of Oil Discovery In Ghana-The EO Groups Role!!!
19 November 2009
Afrikan Post USA (no author named)

Since independence it has been part of every government’s policy to explore Ghana’s hydrocarbon deposits.

Historically, exploration for oil and gas reserves in Ghana had been very limited due to the high risk nature of its terrain and low oil price environment in 2004 when the Kosmos /E.O group made initial contact with GNPC.

Between 1898 to the late nineties an estimated hundred exploration wells had been drilled in Ghana with no significant discovery except for the Saltpond oil find in 1970.

Our expert opinion on the recent oil discovery in Ghana is that it should be seen as a blessing that should serve as a catalyst to drive investment to the country.

It is imperative that we give credit to Ghanaians who have at various times facilitated the inflow of investors into Ghana.

It is an established historical fact that the US diasporans have been trail blazers of solid investment to Ghana. Tribute should be paid to Mr.Ken Ofori- Atta who established the Ghana stock exchange (Databank) in Ghana. Dr. Manny Tuffour who established the Aniwaa Hospital at a location near Kumasi, Mr. Kofi Amoah who brought Western Union to Ghana and many others in various professional disciplines.

Credit also goes to Mr.Tsatsu Tsikata, former Chief Executive of GNPC, Mr.Sekyere Abankwah, Mr. Moses Boateng and the exploration team led by Nana Boakye Asafu-Adjaye and supported by the Mr.Thomas Manu for their untiring efforts in promoting Ghana’s hydrocarbon potential overseas in the past.

In recent times some noble Ghanaian professionals who have a clear and documented track record of Humanitarian assistance to Ghana dating back to the nineties during President Rawlings era are being placed under the political radar for their roles in facilitating investment in the oil sector. Their honorable reputation is being ripped apart when factual and verifiable information is available.

Here are some facts gathered from our expert investigations into the activities of E.O Group. The E.O group is wholly owned by two Ghanaians being Mr. George Yaw Owusu and Dr. Kwame Bawuah -Edusei.

Dr. Kwame Bawuah- Edusei is a physician trained in Ghana and specialized in Family Medicine in The US. He is a known community leader who worked as a private physician partner in various medical clinics until he opened his own in Alexandria, Virginia. In 1994 he took a medical team to Ghana to work in deprived areas and small villages around the Volta Lake, Buduburam refugee camp, Nima in Accra , Akwatia Zongo and other places.

Dr.Kwame Bawuah- Edusei later initiated medical missions to the Northern parts of Ghana as a follow up.

George Owusu on the other hand is a trained Environmental scientist and worked in the energy industry for about twenty years and rose to the rank of Commodity manager for Shell oil Company in the US. He was a known community leader in Houston, Texas at the time of his retirement.

It is on record that the E.O Group partners distributed ICT equipments, books, office furniture and others to various traditional bodies to the youth in Ghana in the late 1990.

Inspite of their humanitarian efforts the partners in 1999 embarked on a job creation venture to reduce poverty. Their first business venture was the formation of E-link Inc. in 1999 to use satellite technology to transfer data between West Africa and United States. The other partners in this venture were Mr. Kwabena Darko of Darko Farms and one Mr.Yaw Sarpong. The venture folded in 2001 due to some challenges.

Mr. George Yaw Owusu and Dr. Bawuah-Edusei regrouped to form the E.O group in 2002 to focus on the potential energy industry in Ghana.

The following companies had been to Ghana for exploration activities without success: NUEVO 1998, Dana 1999, Hunt oil 1999, Fusion oil and gas from Australia in 1999, Santa Fe, 2000. Unfortunately all the wells drilled by these companies yielded no viable commercial discoveries.

The oil industry worldwide therefore regarded Ghana as a place too risky and expensive and their petroleum agreements business unfriendly. It is against this background that the E.O Group sought to convince international oil companies to come to Ghana and overcome all the biases of Africa and invest in what had become known as the “grave yard”

In 2001 with the help of the Greater Houston Partnership, a major business group in Houston, Texas dedicated to the promotion of Business between Houston, Texas companies and the rest of the world,Mr. George Owusu organized a conference in Houston to enable Ghana’s energy experts from GNPC and the Energy ministry address the industry on the offshore hydrocarbon potentials in the Country. Many companies in Texas and the rest of the World attended the conference. The E.O Group facilitated a visit to Ghana by Vanco Energy.

As a result of the E.O groups interaction with industry experts in both Ghana and the USA they stepped up their effort to find a suitable partner for a prospecting lease with the Ghana National Petroleum Company (GNPC). The group was able to partner with Ennex Energy of Ireland who came to Ghana but Ennex gave up on the deal as they evaluated Ghana too risky to invest. The EO group solicited interest from many companies including Texaco, Oxy, Shell, Hess, Addax Petroleum of Switzerland and the Chinese oil company but they were all reluctant due to the risk.

Talking about risk, it costs one million dollars a day to drill an oil well. It can cost up to 80 million dollars to drill one oil well.

In December 2003,Mr. George Owusu came into contact with the Technical personnel of Kosmos Energy whose primary focus was to explore for high risk petroleum prospects in Africa. This group all previously of Triton Energy found oil in Equatorial Guinea in 1999.

The E.O group and Kosmos then formed a partnership to review data in Ghana and initiate the negotiation of a Petroleum Agreement. When in 2004 the Kosmos / E.O group submitted an application for the West Cape Three Points Block, two other companies being Africa Petroleum and Sahara Petroleum submitted their applications for the same block. GNPC after the necessary due diligence approved the application from the Kosmos/E.O Group. The Kosmos /E.O Group therefore won on merit particularly due to their proven track record, financial base and the caliber of experts behind them.

The E.O Group and Kosmos on the sidelines entered into private negotiations and E.O was entitled to 3.5% working interest. They could have asked for a higher percentage in accordance with industry practice. The 3.5% is a private arrangement with Kosmos Energy and not the Ghana Government.

The agreement between Kosmos / E.O Group and GNPC was in accordance with the Ghana Petroleum Law and was approved by the GNPC Board, the ministry of Energy, and upon approval by Cabinet was presented for ratification by Parliament in July 2004.

Neither of the partners of the E.O group, Dr. Kwame Bawuah-Edusei and Mr.George Yaw Owusu were party nor Government officials during these negotiations till approval in July 2004.

It took the Kosmos /EO Group three years from agreement signing in 2004 to oil find in the deep waters of Ghana in June 2007 which is now a record in Africa. It is also possibly one of the largest oil finds in the last decade offshore West Africa

All the four wells drilled by the Kosmos/E.O group encountered significant accumulation of hydrocarbons.

Later in 2006 Kosmos Energy added Anadarko Energy as partner to the WTCP block.

It is worth noting that after the negotiations and agreement was signed in July 2004 Dr. Kwame Bawuah-Edusei sacrificed and took an appointment as Ambassador to UN in Geneva, Switzerland/Austria in August 2004 and in September 2006 he was made Ambassador to the United States.

As a physician in the Diaspora it was a big pay cut. His duty tour ended on February 15, 2009. Within these five years the E.O group had been inactive and Mr. George Owusu had taken over the few affairs of the Group.

Dr. Kwame Bawuah-Edusei who a very respected and influential personality within the Ghanaian community has gone back to his medical practice in the Washington Metro Area. He has also moved back to the House he purchased about fourteen years ago where he lived before his appointment as Ambassador.

Our expect investigations have also revealed that Anadarko, one of the partners in the Jubilee field waited till oil discovery and requested a comprehensive review of Kosmos and the E.O group’s operations which both partners gave their maximum cooperation. The New Government in Ghana has also conducted their review which E.O Group has fully been cooperative. Prior to Dr.Kwame Bawuah-Edusei’s appointment he was in no doubt screened by Ghana, Swiss, Austria, United Nations and the United States security apparatus with a clean record. His tenure in the US was exemplary. The E.O Group has thus been transparent in all their activities.

Considering the undeniable facts in the midst of the political rumblings on the activities of the E.O group I believe the Government of Ghana should round it up and take a positive stance in ensuring that the Country would leap to a middle income status.

There is no need to politicize the good intentions of our honorable citizens because it makes it a disincentive to future investment prospects. Ghanaians living in the Diaspora have been involved in life saving events in Ghana and their efforts must be applauded.

Let us not crisscross corporate greed and misplaced politics to mar our God given potentials.

The E.O Group participation solidifies local content and must be lauded in our efforts to promote long and sustainable investment in Ghana.

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.

Govt studying Exxon-Kosmos deal: State-run Ghana National Petroleum Corp (GNPC) is studying an agreementby Exxon Mobil to buy Kosmos Energy’s stake in the Jubilee field in Ghana before passing it to the energy ministry for its perusal, a Ghanaian government source said on Wednesday.

‘GNPC is required to look a the entire deal as negotiated — the idea is to ensure that it is the best offer not only in monetary terms but also it should come with the technical expertise,’ the government source involved in the energy sector told Reuters.

Oil map offshore Ghana from Borneo British Petroleum

Oil map offshore Ghana from Borneo British Petroleum

There are a number of comments on this article at GhanaWeb that provide more information and insight:

MKO explains in more detail how this works:

1. The Ghana govt granted Kosmos (together with other companies, forming a consortium)exploration rights for a fee, which was paid to the govt. The license (exploration rigths) – comes with some conditions attached.

2. Kosmos as the holder of the equity (by virtue of it contribution to the consortium) has the right to sell its sake to any buyer of its choice.

3. Kosmos is owned by a private equity (PE) group. PE generally operate on short / limited time span on projects. Typically what they do is acquire companies, add value (sometimes thru restructuring or other means), and the sell the company to make profit for the investors who gave them the money to buy the company/ run the project in the first place. The PE group then takes a % of the profit and a commision as reward for their “”management wizardry”” (usually 2% of the total investment commited and 20% of profit realised)
For this reason PE’s are not interested in hanging around unnecessarily – projects usually have a timeline of say 3 to 7years which contractually binding. So if they do not sell before the time they usually lose thier commission and their profits become jeopardized (sometimes zero)

4. Now GNPC on behalf of the governmant of Ghana, has the right of refusal to any deal that KOsmos enters into based on an earlier contract that they have with the Govt of Ghana. The reason for objection would have to be leagally justifiable. (could include lot of issues for example some aspect of the Govt’s contract with Kosmos is being circumvented/ altered in the Kosmos sale to Mobil, Mobil’s business operations has violated Ghana statues in the past and was not resolved, etc, etc,

5 So GNPC has to look at the sale agreement between Kosmos and Mobil to make sure that no clause of the original agreement has been violated.

6. This process is usually just a formality – govts don’t block such sale unless there are other factors such as effect on local competition, monopoly, unfair advantage etc.

7. The main reason why the Govt has to go for these arrangements is because we lack the technical expertise, but more importantly we usually lack the capacity to raise funding for such projects independently on the worlds finance markets.

Kay includes that the:

… State of Ghana gives its natural resource to Kosmos for processing while we share profits at 90% Kosmos and 10% Ghana. Please note that we share only profits, and as a nation, we do not even know what kind of investments the oil companies are making into the project.

That is why today, Kosmos says they have spent $800 million and as a nation, we have no way to verify this. Kosmos has used our own reserves to push their stock market prices to the roof. Now, out of the blue, Kosmos decides to sell the reserves for $4,000 million. What that means is that over time, our profit margins will reduce because Exxon Mobil will have to recoup these investments each year, reducing profit margins that should accrue to Ghana. Kosmos and Exxon are part of one and the same clique. This arrangement then makes it impossible to carry out any form of future re-negotiation with Exxon Mobil.

What is the basis for Kosmos selling the oil for $4,000 million? Only three months ago, they had put it for sale at $3,000 million. …

MKO responds to a number of comments:


To be frank with you I don’t think Kosmos give a toss about GNPC, Exxon or the Chinese. They are only interested in making the maximum return for their investors. Unless of cause there is US governmental influence encouraging them to favour Exxon Mobil. If that is the case, it would also come with a premium (=more $$) so why would they not take it, earn more cash and also earn brownie points in high places. And you would not be able to fault them because they would have brought a globally reputable company with the technical know how and expertise to the table for Ghana to tap into, and would have made their investors tons of money and their govt presumably happy because they’ve created jobs thru Exxon.

Currently there is so much competition for money for oil and gas projects worldwide (this my surprise you, but there is not enough money to go round for every project!! in spite of Sino-dollars)

Bare in mind that there has been significant new finds in Uganda-Kenya, several in Brazil, Liberia/serraloene, Sudan, Gulf of Mexico, North Sea, even Lybia amongst others. The owners of all of these are looking for investments. So do not think that just because we’ve found oil every body will queue to beg to invest with us.

The position of the jubilee fields may be strategic for the US. That I can understand; for example it would be cheaper to transport oil from West Africa than form the Mid-East; like-wise bringing equipment and services.

We’ve been told that production may start in Q3 (jubilee). Why such a wait? There are so many reasons, one of them being that the vessel required for production is now being fitted/ refitted in Singapore. And I understand that it really took a while to secure because of funding constraints.

We need private Ghanaians who would inspire confidence in investors and or collaborators and understand the mechanics of operations – We need to develop local competencies and capabilities, PERHAPS this George Owusu could be a catalyst.

With regards to the Chinese, What I can say is because of forecasted growth in their economy they seems to have adopted the policy of acquiring sakes in sources of energy where ever they can. This also I can understand. However from a business perspective we know that fore casts are usually wrong. Which would raise a few questions

1. If the Chinese because of their wealth acquires so many oil field around the world, would they develop these fields at the same pace? My answer would be No, since it would not make economic/business sense.
And what criteria would they use to develop these fields that they now own? I don’t know. What I know is they are interested in oil for local consumption and not necessarily for trade.

2, What would be the competitive advantage to the Budding Ghana oil industry by having Exxon or Chinese? I would not be able to do justice to this question now.

Finally in my opinion, I think we can have the both. Estimates suggests that there’s lot more oil lying off-shore on our coast. The chinese should perhaps also acquire exploration licenses or buy into other exiting exploration groups …and get to work!

In these things the terms of contracts are related to the risks involved. Relative good terms where there are huge risks, and vice versa. One would therefore expect that going forward terms of contracts should be more favorable to the Country.

Prior to the Kosmos (Tullow, Anadarko) finds, the risks involved were very high – but not so now!
It would therefore worry me if the Chinese want to muscle their way into the Tullow-andarko setup through Kosmos simply because they want to benefit from the terms of contract that these guys have ….which the chinese thinks looks very “Yummy”

Besides …I would not put the Chinese and Tullow-Anadarko (UK, US) together. This combination may lead to inefficiency of operations – to the disadvantage of Ghana. I would rather they compete independently.

I know the US State Department and AFRICOM want a close connection with Ghana. Ghana is strategically located on the coast of West Africa amidst oil finds and other natural resources. Ghana is a working democracy and a congenial place to visit as President Obama found. AFRICOM has been very busy trying to insert itself into Ghana and the Ghanaian military. One Ghanaian comment I read called Ghana the center of the world, the country closest to the intersection of the Equator and the Prime Meridian. I don’t know how relevant this last is, but I like the image. So I think it is entirely possible that there has been US governmental influence encouraging Kosmos to favor Exxon.

Oct. 6 2009 – U.S. oil giant ExxonMobil has bought Kosmos Energy’s stake in oil blocks offshore Ghana that contain large oil discoveries … The deal marks the first entry by one of the world’s major oil companies into what is proving to be a significant new oil province and may pave the way for further acquisitions.

Top: Kosmos’ discovery of the Jubilee Field will enable the Republic of Ghana to join the ranks of significant West African oil exporters. Bottom: Kosmos’ deepwater Jubilee Field development scheme offshore Ghana includes the design and installation of sophisticated subsea architecture connected to a floating production, storage and offloading vessel (FPSO).

Top: Kosmos’ discovery of the Jubilee Field will enable the Republic of Ghana to join the ranks of significant West African oil exporters. Bottom: Kosmos’ deepwater Jubilee Field development scheme offshore Ghana includes the design and installation of sophisticated subsea architecture connected to a floating production, storage and offloading vessel (FPSO).

Analysts at Morgan Stanley put a value of $3.3 billion to $5 billion on Kosmos’ stake in the blocks.

ExxonMobil declined to comment. Kosmos was not immediately available to comment.

The Kosmos blocks contain the Jubilee field, which is operated by Tullow and is estimated to hold between 1.2 billion and 1.8 billion barrels of oil equivalent. A separate discovery offshore Sierra Leone last month by Anadarko, at the western extreme of the same geological formation that contains Jubilee, signaled the potential for further multi-billion barrel discoveries stretching eastward for 1,100 kilometers through the waters of the Ivory Coast and Liberia.

“The Ghanaians should be very pleased. They’ve got an embryonic oil industry,” and now they have the involvement of one of the largest, most experienced and technically qualified oil companies …

A large number of major international and state-owned oil and gas companies were among potential buyers of this strategic asset. These companies have been informed by letter that Kosmos has entered into an exclusive arrangement with ExxonMobil, the person said.

Kosmos holds 30.875% of the West Cape Three Points Block and 18% of the Deepwater Tano block. Its partners are Tullow Oil PLC (TLW.LN) and Anadarko Petroleum Corp. (APC).

Jubilee field straddles both blocks and Tweneboa discovery in Deepwater Tano is thought to be another large oil reservoir.

Here is a map, with a bit more info from Kosmos Energy.

Kosmos map, oil blocks off the coast of Ghana

Kosmos map, oil blocks off the coast of Ghana, click to enlarge

Today, Oct. 7, Reuters updates:

ACCRA, Oct 7 (Reuters) – State-run Ghana National Petroleum Corp (GNPC) is studying an agreement by Exxon Mobil (XOM.N) to buy Kosmos Energy’s stake in the Jubilee oil field in Ghana before passing it to the energy ministry for its blessing, a Ghanaian government source said on Wednesday.

“GNPC is required to look at the entire deal as negotiated,” said the government source involved in the energy sector.

“The idea is to ensure that it is the best offer not only in monetary terms but also it should come with the technical expertise,” the source told Reuters.

The Jubilee field is one of the largest oil finds in West Africa in the past decade.

Sources close to the matter said on Tuesday Exxon had agreed to buy a stake which analysts have previously valued at up to $5 billion.

Under the Ghanaian vetting process for the deal, the energy ministry will pass it on to President John Atta Mills’ cabinet for approval, the government source said without giving a timeframe for a decision.

From the Dallas Morning News:

Exxon Mobil Corp. is in talks to buy a stake in a massive oil field off the coast of Ghana for around $4 billion from Dallas’ Kosmos Energy LLC, according to media reports and a person familiar with the deal.

Kosmos, a privately held oil and gas company that focuses on West Africa, sent a letter to other bidders terminating the process, according to a knowledgeable industry source, and entered exclusive talks with Irving oil giant Exxon. A sale would require approval from Ghana’s government, said two people familiar with the process.

Ghana is set to become West Africa’s newest oil exporter in late 2010, when output begins at the Jubilee field. The deal comes at a time when Exxon’s oil production has declined and the company has said it might fail to meet its 2009 target for 2 percent output growth.

Exxon, Kosmos and the private equity companies involved in the negotiations declined to comment publicly on the deal.

“Exxon Mobil routinely evaluates potential development opportunities around the world. We do not comment on the details of commercial discussions or opportunities,” Exxon spokesman Patrick McGinn said in an e-mail.

Kosmos is led by James Musselman, former chief executive at Triton Energy Ltd. Triton discovered oil off the coast of Equatorial Guinea and was sold to Hess Corp., then known as Amerada Hess Corp., in 2001.

Musselman and his partners started Kosmos in late 2003 after raising $800 million from private equity investors Blackstone and Warburg Pincus.

The Jubilee sale marks the company’s first asset sale. Rather than producing oil, Kosmos’ business model is finding oil fields and selling them.

The Wall Street Journal reports:

Blackstone Group LP (BX) and Warburg Pincus LLC’s stake in Kosmos Energy has turned out to be black gold, indeed.

The agreed-to sale of the company’s stake in several oil discoveries off the coast of Ghana to Exxon Mobil Corp. (XOM) for $4 billion represents a cash on cash return of approximately four times for the two buyout firms over a period of five years or so.

Blackstone declined to comment on the deal’s internal rate of return; Warburg Pincus could not be reached for comment. The two firms own most of the company, with Warburg Pincus holding the larger share, at 55%. Management also owns a small stake.

The two initially invested $300 million in the business in 2004 to help it explore for oil and gas in West Africa. Upon the 2008 discovery of the Jubilee field, one of the larger recent finds off the West African coast, they put in an additional $500 million.

It was a big bet in a geographic region that other oil companies had scoured for years with little luck. But Warburg Pincus and Blackstone were willing to place their faith in Kosmos Chief Executive Jim Musselman and his team, who had delivered a home run for private equity before. The Kosmos team had previously led Triton Energy Ltd., a company backed by Hicks Muse Tate & Furst Inc. that was sold to Amerada Hess Corp. in 2001. Hicks made back $1 billion on that $350 million 1998 investment.

It is fairly common for private equity firms to provide capital to experienced management teams in the oil and gas industry, allowing them to develop resources to the point where the company can go public or draw the interest of a larger strategic player. That model is now being seen increasingly in emerging markets as well as private equity firms expand their global reach.

Another major player off the coast of West Africa, Cobalt International Energy Inc., filed for a $1.15 billion initial public offering last month. That company is backed by First Reserve Corp., Carlyle/Riverstone, Goldman Sachs Group Inc. and Kern Partners Ltd., and in April partnered up with French oil giant Total S.A. (TOT) to prospect for oil in the U.S. Gulf of Mexico’s deepwater.

First Reserve also recently set up a new venture in Southeast Asia, KrisEnergy Holdings Inc., to explore for oil and gas, committing $500 million to support it.

Older deals include a $35 million 2008 investment by Emerging Capital Partners in Ocean & Oil Investments Ltd., a Nigerian investment company; and a $380 million investment led by Pine Brook Road Partners LLC in 2007 in Asia Pacific Exploration Consolidated LP.

The sharks are out in full force. Ghana will need to swim like a dolphin. As most readers here already know, the problem with the oil resource curse is not just that it keeps people poor, it actively makes them poorer than if there was no oil.

You can see a range of Ghanaian reaction in the comments to the original article on GhanaWeb, here are some samples:

Idiots in Govt writes: Yes, let’s go for the big boys. They may not give you as much on the side but they will do a good job. Good Job Mills.

Sir Jay writes: with America company now on board, Ghanaians must tightened their belts and hope for the worst for Ghana. just look at the Ogoniland and its people and it will not be hard to see what Exxonmobil is capable of doing.
Now the future is bleak.
I am scared !!!!!!!!!

American boy writes: ExxonMobile is quite possibly the worst company you’d want coming into your country.
I guarantee you this will happen. There will be a few, maybe 100 corrupt Ghanaians who will get rich from the oil.
Everyone else will not even know oil was discovered anywhere and will continue to be poor.

Unfinished Vision writes: Let the rip off begin — I mean resume.

Diamond replies to Unfinished Vision: Strong message with a humorous twist.
Beautiful.
All we have to do is to tell them what we want. If they do not like it, we can seek other partners.
Nobody is totally safe, but maybe the Chinese? Russians?
Boy, I pain for Ghana.
Is there hope in any direction?
The Saudis, the Emirates, the Kuwaitis?
Can anyboby give us an honest deal?
Can any of our politicians work for us?
Mabey & Johnson (Ghana), Scancem (Ghana), British Aerospace (Tanzania), Haliburton (Nigeria).
Oh, Afrika.

Annex writes: These guys are such bad news. They are so tied to the U.S imperialism, I feel so sad for Ghana. They will influence our politics and corrupt are leaders. NDC are proving to be worse capitalists than NPP. It may true Obama showed up because of oil.

DRAGON alexandria.VA writes: they are the cause of nigerias oil calamity.environmental degradation,pollution,corruption etc..mills be careful with this company

Nana Kwame writes: Exxon/Mobil is a unscrupulous oil predator. Ghana should not rejoice because of their interest.
It is about time GNPC raises enough funds from China, remember China has a $1.95 trillion foreign reserves to lend, so that we buy this Exxon/Mobil interests out of the venture.
Exxon/Mobil is just a gigantic oil predator and parasitic company. It simply has not got the development interests of developing countries at heart.

emmanuel writes: Why should this be any surprise? The purpose of ANY corporation is to make money for the stockholders. If you don’t like that then try communism and see where that gets you.
If Exxon had priorities other than making money for the shareholders then it would have gone bankrupt a long time ago. It is a damn successful and well-run company–in fact it is the biggest corporation in the world.
Should corporations have limits placed on how they do business to protect citizens and employees from abuse? Absolutely. Just make sure that Exxon does things in manner prescribed by law (and if they are allowed to get away with such things in Ghana then whose fault is it, really?

Kaakyie_Nua writes: This is the same Exxon/Mobil which packed up, sold its assets to Total and left town rather unceremonously. The question our politicians should be asking is this: Why do they want back in?
U see they got the daylight kicked out of them by Hugo Chavez and so they want to weasel their way back into Ghana and take advantage of us again.
While Ghana is open and receptive to mutually beneficial foreign investments, Prof. Mills and his team should make it abundantly clear to all commers including Exxon/Mobil that the “rules of the game” have changed and that the benefits of the oil find should should be enjoyed, first and foremost, by Ghanaians particularly the local inhabitants. For this to happen they should take steps to prevent excessive “Flipping” that is commonplace in the oil industry.
If Exxon/Mobil has come back to stay, then they are welcomed to help us develop our oil industry. If this is not the case, then they will be better off somewhere else. Perhaps in Alaska their own backyard.

Lin writes: I am an American and know how American corporatons operate. Ghana
is in the driver’s seat now. But if it isn’t careful it will be riding in the back seat and the driver won’t be a chauffeur. Before the game begins be sure they ante up and above all cut the cards. Also stop the ngame from time to time and get a new deck.

Ogyam writes: what is all these? can someone explain? just confused. SIMPLE!!

Kaakyie_Nua writes: Have done their bit and the “big players” the likes of Exxon/Mobil etc have come in to take over.
They have paid Tullow a decent price plus handsome profit for the leg work they have done.
The trouble for Ghana is that the value of this find on paper has shot up substantially when nothing has changed in terms of the physical assets on the ground.
Look, I am sure made all kinds of promises to the local residents and the govt and we live to see if Exxon/Mobil will honour all of them.
Look at it this way: Instead of the corner mechanic servicing ur automobile, u have a delearship taking care of it. Do u think ur maintenance costs are going to be lower? Remmember the R&D operations take place in the home country and the local operations have no say how much they have to pay headquarters in the States.
True a similar thing would have transpired under Tullow but to a much lesser degree. U see size matters a lot in business dealings.

JO ZONGO writes: I think that´s good news as well. Most experienced and qualified companies can help our stuation more in. But where from this infomation? GHANAIAN NEWS or GHANA NEWS?

Nana Kwame asks: When was the last time the CEOs of the major oil companies helped you?

Pastor Ernest Opoku Agyeman writes: I think in dealing with the contract of the oil, political divisions should be set aside. The focus should be Ghana and the people of Ghana. Secondly, the managers representing Ghana should be careful in dealing with every aspect of the wording of the contract and consider inflation in the next 50 to 100 years. We should not forgotten the timber, gold, diamonds, bauxite contracts that did not help Ghana due to the fact that our people did not think about the future before undertaking that contract. All the politicians must come together and think through what the benefits or development shall we need from these companies. Next…

Big Talk writes: 10 %.Can you beleive this? And they have started taking loans even before their ……%.

No Wonder writes: It looks good yet it’s a death warrent to many folks to come. This is a company whose dealings has cost so many human lives and burn the earth around the globe including their own home country, talk to the Alaskan, south Americans – Amazon forest etc. Now they are coming to Ghana and will support both political parties like they do in their own homeland but in our case they will do what they do best take the oil out send the funds back in arms – weapons so we could distroy ourselves. Look at Nigeria etc. so before we go out singing and dancing please listen to the tune and watch the drummers carefully before they change the beat on you.

The Jubilee field is one of West Africa’s biggest oil strikes in years, likely containing recoverable reserves of at least 1.2 billion barrels of oil equivalent, with first output scheduled for the second half of 2010.

Jubilee field and Ghana offshore oil map

Jubilee Field Ghana offshore oil map (click to enlarge)

Jubilee Field (click to enlarge)

Jubilee Field (click to enlarge)

I thought I’d put together some information on Ghana’s Jubilee oil field, as it will have a powerful effect on Ghana, and change Ghana in ways we may not anticipate.

From the Ghanaian Times via Ghanalinx, source of the offshore map above:

“The International Monetary Fund predicts government revenues from oil and gas could reach a cumulative $20 billion between 2012 and 2030 in the Jubilee field alone,” a statement issued jointly by the Integrated Social Development Centre (ISODEC) and Oxfam America said.

The statement signed by Ruby Kissiedu for the Co-odinator, Media and Campaigns of ISODEC has, therefore, commended President John Evans Atta Mills for his commitment to increase transparency and public participation in the oil sector.

It said the exploitation of national resources in Africa, has often led to increased poverty and conflict, a phenomenon often referred to as ”resource curse”,

The statement said President Mills could help Ghana to avoid corruption, underdevelopment, social conflict and environmental damage brought on by too many oil booms around the world.

It recalled President Mills’ recent announcement in which he promised accountability on the part of all public officials and asked Ghana’s development partners and non-government agencies to support government’s efforts to build transparent and anti-corruption initiatives.

This is an important step to preserve Ghana’s record of good governance and stability by preparing Ghana to support accountable and efficient development of the oil industry and the billions in government revenue it will generate.”

It said the two bodies were ready to work with the government to improve revenue generation especially by reviewing the mineral’s fiscal regime to ensure that mining companies pay more than the current minimum of three per cent royalties and to monitor the Jubilee Oil Field and other oil projects to ensure a maximum oil recovery at minimum cost.

We are also ready to support government in the protection of the livelihoods of fisher folk and other communities around the Jubilee Oilfield as well as the larger marine ecological zone of the Gulf of Guinea,” it pledged .

The statement said the World Bank has committed 215 million US dollars in financing Kosmos Energy and Tullow Oil in support of the development of the Jubilee field.

It said, there was therefore the need for transparent revenue and payment practices, open and competitive contract bidding, active participation by civil society, and adequate legal and regulatory regime of the oil sector.

Let us hope these promises are fulfilled, and do what we can to see that they are fulfilled.

And from Ghana’s coming oil boom by Masahudu Ankiilu Kunateh:

The Jubilee field, named for the fact that it was discovered in the same year the country celebrated 50years of independence, may reach a production level of 120,000 barrel per day (bpd) by 2011. (Ghana’s current consumption of oil is 40,000 to 60,000 bpd, almost imported.)

Depending on oil prices and future production levels, Ghana could soon see more than $1billion added to government revenues each year, according to conservative estimates by the German Technical Cooperation Organisation (GTZ). Even much lower estimates will easily eclipse current revenues from mining (largely gold) exports.

It is important to point out that, Ghana’s life as an oil producer may be relatively short-20-30 years-and the country must move rapidly to beef up its legal and administrative framework to meet the significant managerial, administrative, political, and financial challenges the oil rush presents.

Ghana ’s birth as an oil producer coincides with a political transition-with a new presidential administration, cabinet ministers, and parliament installed in January 2009.

Because the Jubilee field straddles two blocks governed by two petroleum agreements, the oil companies involved and the Ghana National Petroleum Corporation (GNPC) have had to develop a “unitization agreement” to develop a joint contractual framework and geographically delimit the Jubilee field area.

Instructively, beyond the Jubilee field, there is active exploration and licensing interest in Ghana ’s offshore areas, much of this spurred by the 2007 discovery.

Kosmos, Chief Executive Officer, Musselman told African Energy during an October 2008 visit to Ghana that “We have been able to identify a couple of areas with the attributes as Jubilee field, and we have a high degree of confidence of making another find as big as Jubilee”.

In October 2008, Kosmos said the company would sink five wells in the coming 200 days in the Jubilee field, spending up to $100million in the process. Tullow drilled a successful exploration well-Ebony 1-in the shallow water Tano license area.

Anadarko’s CEO has said, “The partnership expects to be active in the area in 2009 and anticipates drilling development, appraisal, and at least three additional high impact exploration wells, including Tweneboa, Teak, and Onyina”. The drilling of Tweneboa was planned to begin in January 2009.

Other exploration wells have been drilled or are being planned for the Keta block and the South Deepwater Tano block.

Added July 17

Kosmos Energy was originally scheduled to auction off its 30% stake in the Jubilee Field today.  A number of major corporations and countries, including India and China, were interested in bidding.  But this week Kosmos was able to obtain funding to develop it themselves:

Financing to Fully Fund Company’s Share of Jubilee Oil Field Phase-One Development Offshore Ghana DALLAS, Texas, July 14, 2009 – Kosmos Energy announces today that it has signed definitive documentation for US$750 million project finance debt facilities.

The facilities are to be secured by the shares of the company’s subsidiary Kosmos Energy Ghana and its interest in the world-class Jubilee oil field offshore Ghana. This financing will fully fund Kosmos’ share of Jubilee’s phase-one development.

Kosmos, operator of the West Cape Three Points Block, drilled the Mahogany-1 exploration well that discovered the Jubilee Field, the world’s biggest oil find in 2007 and one of the largest oil discoveries offshore West Africa during the last decade.

Kosmos has drilled seven consecutive successful exploration and appraisal wells for a 100 percent success rate for all the wells the company has drilled to date offshore Ghana. (more) Kosmos and its partners are executing a phased development plan for the Jubilee Field, which is located on the West Cape Three Points Block and adjacent Deepwater Tano Block. The company believes that phase-one development will produce in excess of the planned 300 million barrels of recoverable oil. The designed production capacity of phase one is 120,000 barrels of crude per day.

At the same time the Ghana government is taking steps to provide accountable and efficient development of the oil industry, Ministry issues a stern warning:

Accra, July 15, GNA – Dr. Edward Kofi Omane Boamah, Deputy Minister of Environment, Science and Technology, on Wednesday said the ministry would not stand by and watch players in the oil and gas exploration industry destroy the country’s ecology and sacrifice the health and safety of citizens.

It appears the current government is serious about trying to protect the citizens of Ghana. I hope they are truly serious and this continues. I feared the previous government was setting itself up to loot the country. President Kufuor invited Barclays to establish an offshore tax haven. That danger is still present, I wrote more on it in this post: Barclays Bank To Support Poverty & Crime In Ghana & West Africa.  A nearby tax shelter would be a powerful and convenient tool to steal from the Ghanaian people, and to hide the bribes that fuel corruption.

With tax havens and banking secrecy, the big corporations, already richer than many countries, the big money players:

… can quite legally cut themselves loose from pesky full taxation and grow explosively, leaving smaller competitors, who pay their full dues along with the rest of us, choking in their dust. This undermines the very notion of capitalism: the big companies’ advantage has nothing to do with the quality or price of what they produce. If you are worried about the power of big global corporations, don’t always attack them directly, but attack bank secrecy instead.
(Poisoned Wells: The Dirty Politics of African Oil, by Nicholas Shaxson, p.225&227, ISBN 978-1403971944)

Who are the victims of corruption?

The most obvious way corruption hurts society is its neutralizing effect on public servants, be they police or politicians, or anyone in between. Nigerians have their own word for when that happens; those on the take are said to be “settled.”

Nuhu Ribadu was a crusading prosecutor in Nigeria before an attempt on his life forced him to leave the country.

“When you fight corruption, it fights you back,” he says matter-of-factly. … “Unless we address the problem of corruption,” he says, “there is no hope, there is no future.”

This is something that no one among us has the power to do with our sovereignty. It amounts to the attempted robbery of the nation by the force of arms. In a fundamental matter such as this, that has serious implications on our status as an independent nation, that could even mean life or death to Ghanaians, as we have seen in the bombs that continue to fall on marriage ceremonies in Afghanistan, the minimum expectation ought to have been an open democratic national debate and not secretive and conspiratorial manoeuvres.

TAKORADI, Ghana - A traditional fishing boat sails in the Gulf of Guinea near the fishing village of Takoradi, west of Ghana's capital, Accra, on March 2, 2009. U.S. Africa Command's civilian deputy, Ambassador Mary C. Yates, met with local fishermen to discuss ways that maritime security programs can protect fishing stocks, which are a vital source of food in West Africa. Inset: Nana Ekow Akon, chief of the Takoradi fishing community, speaks with U.S. Africa Command's civilian deputy, Ambassador Mary C. Yates, on March 2, 2009. Yates visited West Africa to discuss international cooperation in illegal fishing, counter-narcotics and illicit trafficking. (Photos by Vince Crawley, U.S. Africa Command)

TAKORADI, Ghana - A traditional fishing boat sails in the Gulf of Guinea near the fishing village of Takoradi, west of Ghana's capital, Accra, on March 2, 2009. U.S. Africa Command's civilian deputy, Ambassador Mary C. Yates, met with local fishermen to discuss ways that maritime security programs can protect fishing stocks, which are a vital source of food in West Africa. Inset: Nana Ekow Akon, chief of the Takoradi fishing community, speaks with U.S. Africa Command's civilian deputy, Ambassador Mary C. Yates, on March 2, 2009. Yates visited West Africa to discuss international cooperation in illegal fishing, counter-narcotics and illicit trafficking. (Photos by Vince Crawley, U.S. Africa Command)

Nana Akyea Mensah writes in US Military Base In Ghana in response to a feature article on GhanaWeb by Asare Otchere-Darko, Obama’s Visit – What’s In It For Us And U.S.? Otchere-Darko’s article describes and implies that Kufuor did a deal with Bush and General Ward, bringing the Africa Command into Ghana without informing the Ghanaian people.

… in August 2007 Major-General Ward, who was later confirmed as AFRICOM’s first commander, visited Accra. He held discussions with President Kufuor on “ways of strengthening military cooperation.” His high-powered secret meetings with the President, Minister of Defence and the Chief of Defence Staff triggered huge speculation. Much was made of Maj Gen J B Danquah’s public statement about the visit when he said Maj Gen Ward had ‘done enough to resolve’ Ghana’s concerns about AFRICOM, adding, “I have had the chance to hear [Ward] explain what is the reasoning behind the command, and it’s all about partnership.”

This passage is preceded by:

At the moment the Americans say they are happy to keep the U.S. Africa Command headquarters in Germany, to coordinate all U.S. military and security interests throughout the African continent. But any reasonable assessment must conclude that this can be nothing but a temporary address and arrangement. Ghana should welcome that it is thus the target of America’s desire – and we should make the most of this, using it for our own advantage. After all, the process has already started.

The U.S. and Ghanaian militaries have cooperated in numerous joint training exercises, including the African Crisis Response Initiative, an international activity in which the U.S. facilitates the development of an interoperable peacekeeping capacity among African nations. And the head of AFRICOM has already reaffirmed Washington’s commitment to assisting the Ghana Armed Forces “to become more robust”. There is also the African Contingency Operations Training and Assistance program. Beyond that, Ghana and the U.S. have an active bilateral International Military Education and Training program. In 2007, Kwesi Pratt Jnr, the Managing Editor of The Insight newspaper and the energy behind the pressure group Socialist Forum, warned Ghanaians against what he saw to be the looming danger of a U.S. military base in Ghana. He cited, inter alia, the erection of the huge American Embassy complex in Cantonments as evidence of this.

And Otchere-Darko follows it with this:

General T. Hobbins, head of the U.S. Air Forces Europe, has held discussions with his counterparts here on the possibility of establishing “lily pads”, landing and rapid airlift facilities in otherwise deserted terrain in certain strategic sites in Africa. Tamale Airport has come up as one of the “forward operating sites” targeted. That airport is said to have a runway capacity of accommodating massive U.S. C-3 cargo planes and troop transports.

Ghana is also already the site of a U.S.-European Command-funded Exercise Reception Facility that was established to facilitate troop deployments for exercises or crisis response within the region. The direct link to our oil is only too apparent: the Facility came out of Ghana’s partnership with the United States on what is termed a Fuel Hub Initiative. It may sound like a mere gas station for the troops. But the choice of stable, imminently oil-rich Ghana as a Fuel Hub reflects a greater strategic interest in the country than as merely a filling station.

The Americans have not been shy in establishing a clear economic link alongside their military cooperation.

There are already lily pads and a robust American military presence in Ghana, which I have written about previously in this blog.

Kwesi Pratt was one of the first to raise the alarm about oil and US military bases in Africa. In a 2007 interview he said:

Kwesi Pratt: I am very alarmed after reading what is called the Cheney Report. When Bush came to power, he set up a committee chaired by Dick Cheney his Vice President to assess America’s energy requirements up to the year 2015. The Cheney Report actually says that by the year 2015, twenty percent of American oil requirements will be supplied by West Africa and therefore it is important to maintain a foothold in West Africa in order to ensure that oil supplies from West Africa to the United States of America will not be interrupted.

Consequently, the United States is planning to establish military bases across West Africa including Ghana. And I am very worried that at a time when we are celebrating our national independence we are going to tolerate the establishment of foreign military bases, especially American military bases on our soil. The great Osageyfo Dr. Nkrumah, Malcolm X, Kwame Ture, and all of them emphasized that Africa ought to be free from foreign military bases and weapons of mass destruction. We cannot allow that dream to die.

That is why, it is important for us to resist all attempts to establish foreign military bases on African soil especially forces of the United States, must be prevented from establishing on African soil. Clearly because they are not on African soil to protect our interests, they are on African soil to facilitate the exploitation of our resources for the benefit of the tiny minority that controls the wealth of the American people and who are sitting on top of this world exploiting the Chicanos, exploiting the African Americans and exploiting all of the other independent and healthy forces in the United States on America. We have to resist all attempts to build U.S. military bases in Ghana and elsewhere in Africa.

Nana Akyea Mensah writes:

I feel greatly incensed by the casual manner Mr. Ochere-Darko breaks this news as though it is simply a matter of business, and not even making any attempt to explain the basis of the conspiracy that he confesses in the article. What does this mean? According to Asare Ochere Darko, even though the NPP government did not allow Ghanaians to have a say in whether or not they want a US military base on our soil, it is too late for the Atta-Mills government to say “No”! In other words, without any national debate, whether we like it or not the process has already been started and they cannot be reversed, so we are as good as being already occupied by a foreign power!

Is this supposed to mean that the NPP government was simply throwing dust into our eyes whilst plotting secretly to undermine our national independence and sell us to the Americans? Fortunately for Ghana and Africa, the elections did not go their way. From the article under discussion, it seems to me that with Obama and Atta-Mills in power, the same special interests behind the establishment of the military base in Ghana, the military industrial complex of the USA, are acting as ventriloquists, using their local stooges, to revive their diabolic plot, and rope the two newcomers into the deal. Who else could fit better in the role of selling Ghana to the imperialists more than the very right hand man of Nana Addo Danquah Akufo Addo, the great Asare Ochere-Darko, himself? If you should ask me what it was that worried me most in the article, I believe I would put my finger on the following seven words written by Mr. Ochere-Darko: “After all, the process has already started.” Most of us are still dazed by the question. What this man is virtually telling Ghanaians is that for months, the NPP has been secretly plotting with foreign powers to establish military bases on our lands without letting out a word about it to the Ghanaian public.

The picture above is of Mary Carlin Yates, AFRICOM’s top civilian employee, promising that AFRICOM can help protect Ghana’s fishing rights, and help protect against drugs. But money for these programs was cut from the Pentagon’s budget. As Daniel Volman informs us in AFRICOM from Bush to Obama:

AFRICAN COASTAL AND BORDER SECURITY PROGRAM (ACBS) – provides specialized equipment (such as patrol vessels and vehicles, communications equipment, night vision devices, and electronic monitors and sensors) to African countries to improve their ability to patrol and defend their own coastal waters and borders from terrorist operations, smuggling, and other illicit activities … No dedicated funding was requested for FY 2008 [or in 2007]

With this in mind, I cannot help thinking that Ms. Yates is, in the very best interpretation, being misleading.

Ms. Yates said in Washington on May 12th:

She disclosed that of the four major target areas of its mission-statement, which explicitly are, reducing conflict, improving security, defeating violent extremism and supporting crisis response. The three words that highlight the Command’s activities are “sustained security engagement”.

“When I was U.S. Ambassador in Ghana, we had a robust military-to-military program. We started the State Partnership Program. What we want to do is to find the African partners who are looking to build peace and stability in their nations and in their regions – partnering with those African standby forces as they build their goal is to come online with battalions for each of the five geographic areas by 2010”.

Five battalions do not mean more peace. Just like lots of police in a neighborhood are an indication of crime and violence, lots of soldiers in a country or region are a sign of war and conflict. If it is not there already, they will bring it.

Open and democratic debate is the currency of democracy. It is sadly lacking in many places that call themselves democracies, including being far too lacking in the United States. Mr. Ochere-Darko says:

But we must not ignore America’s interest. After all, whatever his connection to the African continent, Obama is President of America – and acts in the interest of its people at home above all else.

And so far, in terms of policies, Obama has shown himself to be a willing and enthusiastic supporter of the entrenced elites, what Kwesi Pratt calls the tiny minority that controls the wealth of the American people. Obama has allowed a certain amount of democracy theater in his political manueverings so far. But he has carefully closed off any areas of debate he does not wish to entertain. And President Obama seems to be continuing all the same military imperialist programs initiated by Mr. Bush.

I have been an enthusiastic supporter of President Obama. I made my own small contributions to his campaign. He is wildly and justifiably popular in Ghana and Africa. This should not blind us to what is going on. And it should not stop us from exercising our democratic responsibility to speak out and say what we see.

ADDED June 8th:
For a broader sampling of Ghanaian opinion, read the comment threads on these three posts, listed below, from GhanaWeb. As Nana Akyea Mensah says:

We had an interesting discussion on Ghanaweb yesterday, and as usual an overwhelming consensus was a clear and mighty “NO TO AFRICOM!”

US Military Base In Ghana

Obama’s Visit – What’s In It For Us And U.S.?

Ghanaians Discuss AFRICOM & Obama’s Visit

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