offshore


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”

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.

Barclays off-shore banking will bring more of this to Ghana

Barclays offshore banking will bring more slums like this to Ghana

In a move guaranteed to increase poverty and crime throughout Ghana and West Africa, Barclays Bank, at the 2005 invitation of former President Kufuor, is setting up off shore banking in Ghana. Other big banks are waiting to join in the tax haven business in Ghana following Barclays lead.

Barclays bank is playing a lead role in the establishment of a tax haven in Ghana, in a move that could see huge mineral wealth in west Africa vanish into it from poverty-stricken countries’ coffers, the Observer can reveal.

The controversial British lender has for the last four years worked closely with the Ghanian government to start an International Financial Services Centre offering low taxes and minimal financial disclosure.

Development charities fear that the establishment of a fully operating tax haven so close to oil- and mineral-rich countries such as Nigeria, Sierra Leone and Equatorial Guinea will encourage a rapid increase in tax and capital flight.

There is also concern that cocaine barons, increasingly using west Africa as a trafficking route into Europe, could launder drug money through Ghana.

Oil-producing nations are plagued by corruption and drug trafficking and the creation of this international financial services centre will make this worse – not better.”

This move was initiated in 2005 by former President Kufuor. In light of what we now know about the theiving and raids on the treasury by himself and his cronies, it looks like they were planning ahead to hide stolen assets from the people of Ghana. We know Kufuor initiated this move from an article on GhanaWeb in 2005, when the offshore banking plans got underway:

Barclays Bank to assist Ghana establish off-shore banking
2005 Accra, March 30, GNA
Barclays Bank Plc is to assist the Government to establish off-shore banking in Ghana, Mr David Roberts, Executive Director of the Board of Directors of Barclays Plc and Barclays Bank Plc, said on Wednesday.

“We have to make the necessary arrangements to make off-shore banking operational in Ghana,” he said in reaction to an appeal by President John Agyekum Kufuor that the Bank cooperated with the Government to establish offshore banking.

President Kufuor made the appeal when a delegation of the Bank’s Directors attending the first International Executive Committee Meeting outside Europe in Accra, paid a courtesy call on him at the Castle, Osu.

The discovery of oil in Ghana was not announced until June 2007. But by 2005 they knew it was in the works. The Cape Three Points Deep Petroleum Agreement was signed in 2002, and potential oil fields mapped, also in 2002. So it seems likely Kufuor and his NPP cronies were planning for the influx of oil cash, and a place to stash and hide the money conveniently close to home. Even without oil, their misappropriation of government assets is impressive. There are many examples documented on GhanaWeb, such as Massive looting at Ministries, especially since the change in government has brought a bit more transparency. Financial transparency is what every watchdog group says is needed in the African oil and resource business. Financial transparency is what off shore banking is designed to eliminate.

Barclays Bank has been repeatedly implicated in illegal and unethical banking operations. In March the Guardian published a number of internal memos from Barclays, from WikiLeaks:

The documents are copies of alleged internal memos from within Barclays Bank. They were sent by an anonymous whistleblower to Vince Cable, Liberal-Democrat shadow chancellor. The documents reveal a number of elaborate international tax avoidance schemes by the SCM (Structured Capital Markets) division of Barclays.

According to these documents, Barclays has been systematically assisting clients to avoid huge amounts of tax they should be liable for across multiple jurisdictions.

A commentator to the Financial Times stated:

I was lucky enough to read through the first of the Barclays documents…

I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me. The intricacy and artificiality of the scheme deeply was absolutely evident, as was the fact that the knew exactly what they were doing and why: to get money from one point in London to another without paying tax, via about 10 offshore companies. Simple, deliberate outcome, clearly stated, with the exact names of who was doing this, and no other purpose.

Until now I have been a supporter of the finance industry – I work with people there regularly and respect many of them, and greatly enjoy the Financial Times and other financial papers. However this has shone a light on something for me, and made me certain that these people belong in jail, and companies like Barclays deserve to be bankrupt. They have robbed everyone of us, every single person who pays tax or who will ever pay tax in this country (and other countries!)

If Barclays can get away with this in the UK, with UK laws and enforcement, how much more can they get away with in Ghana, where the current legal and enforcement communities have a much shorter history, and are grossly underpaid.

Barclays have also been implicated in corrupt associations and illegal dealings with Equatorial Guinea, and along with other banks in Angola. From the BBC:

The same lax regulation that created the credit crunch has let some of the world’s biggest banks facilitate the looting of natural resource wealth from poor countries.

I have quoted Nicholas Shaxson in previous posts, but what he says regarding the movement of money is right on the mark:

There are basically three forms of dirty money. One is criminal money: from drug dealing, say, or slave trading or terrorism. The next is corrupt money, like the fromer Nigerian dictator Sani Abacha’s looted oil billions. The third form, commercial money – what our finest companies and richest individuals hide from our tax collectors – is bigger. The point – and this is crucial – is that these three forms of dirty money use exactly the same mechanisms and subterfuges: tax havens, shell banks, shielded trusts, anonymous foundations, dummy corporations, mispricing schemes, and the like, all administered by a “pinstripe infrastructure” of mainstream banks, lawyers, and accountants.
. . .
In this parallel secret universe the world’s biggest and richest individuals and firms, News Corporation, Citigroup, and, yes, ExxonMobil – 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. This is the clever way to take on the big fish, using a net that would also snag the Sani Abachas, the Mobutus, the North Koreas, the terrorists, and the drug lords.
(Poisoned Wells: The Dirty Politics of African Oil, by Nicholas Shaxson, p.225&227, ISBN 978-1403971944)

In 2007 Kufuor and Barclays raved on about what a wonderful opportunity offshore banking would be for Ghana:

President Kufuor said … the Government was fully aware of the numerous challenges and difficulties inherent in the operation of the facility and gave the assurance that the necessary safeguards had been put in place to stave off abuses.

Legal and administrative measures, he said, had been enacted to provide the needed checks and balances within the economy in particular and society in general.

“These measures should promote best practices in service delivery. More importantly, they should affirm the good faith and determination of the entire society to make Ghana a safe, secure and peaceful environment for investment.”

President Kufuor, through whose initiative the offshore banking had become a reality, said It must help to transform the financial system for accelerated socio-economic development.

He said last year, 658 billion dollars was transferred from developing countries to the developed countries, noting that if about half of this had been lodged in such a facility in Africa, the pace of development of the Continent would have been tremendously enhanced.

If that money had gone into offshore facilities in or near the developing countries, it would have made no difference. The reason for offshore banking is to evade the checks, balances, and safety measures. In fact, offshore banking will allow and promote the legal and illegal theft of money from Ghana, and is designed to do just that. Corporate money, drug money, stolen money, money from arms deals, money from illegal bunkering and corrupt politicians, all disappear offshore. Barclays and other big banks take money out of the reach of the countries those assets came from, and out of the reach of the governments and the citizens they are supposed to serve. I doubt Kufuor’s lavish praise for offshore banking was due to naivité. He was planning to be one of those advantaged by the bank at the expense of his own country. It is not for nothing he is known as Thiefuor to many of his countrymen.

Aside from those few who become very rich indeed, oil, and other extractive resources can make a country much poorer. The phenomenon is described in this article in Foreign Policy:

Collier’s model shows that producers of oil, timber, and minerals would on average see their gross domestic products rise by 10 percent in the first seven years, only to have them crash two decades later to only 75 percent of where they started. Sudden cash flows in unprepared countries, he says, lead to unsustainable public consumption, rising inflation, soaring inequality, trade protectionism, and a real danger of civil war.

As Shaxson points out:

People often put the problem like this: oil money would be a blessing but politicians steal it, so people don’t see the benefits. But it’s much worse: the oil wealth not only doesn’t reach ordinary people, but it actively makes them poorer.

Barclays and other big banks help make and keep the majority of people poorer. They insure there is no level playing field. Offshore banking is the tool that possessors of criminal money, corrupt money, and commercial money use to hide that money from its source, and to prevent reinvestment in the people and the places the money came from. That is why it is so shameful for Ghana to be setting up offshore banking. It is shameful that a former president initiated and promoted this tool to steal from the Ghanaian people, and it is shameful for the current government if they allow this to proceed as planned. If offshore banking goes forward, slums such as in the picture above will expand exponentially, people will suffer and die because their assets are being stolen from them, and they have nothing to fall back on.