Making oil a blessing in Ghana: as oil production officially began in Ghana on 15 December, President John Atta Mills pledged his government's determination to ensure that oil "becomes a blessing and not a curse. We will not let you down," he told an expectant nation yearning to see the benefits of oil improve the living conditions of its people. Stephen Gyasi Jnr reports.
In a televised ceremony, President Mills, wearing safety gear and blue overalls, opened the valve at Jubilee Field some 40 miles off the coast of Takoradi in the Western Region, and promised the citizenry their fair share of dividends from the new national resource. Jubilee Field is estimated to hold 1.5 billion barrels of oil. A second offshore field discovered in September last year--Tweneboa Wells--is believed to hold another 1.4 billion barrels. The fields are some of the largest oil deposits found in recent years.
With the Western Region providing a great deal of Ghana's mineral resources as well as cocoa, residents are waiting with bated breath to see if the oil revenues will bring the long-neglected region any windfall. Already the region is asking for 10% of the oil revenue, as promised them by President Mills' vice president, John Mahama, during the 2008 election campaign. Last year, china gave Ghana a loan of $3bn to develop several oil-related industries in order to sharpen its competitiveness in the oil market, and also to create more jobs for the people.
The first shipment of 86,312 barrels of oil left the Jubilee Field three weeks after production began, en route to a still unknown destination. The Jubilee Field was discovered in 2007. A consortium of oil companies--including Tullow Oil, Anadarko Petroleum Corporation, and Kosmos Energy--has acquired a controlling stake while the Ghana National Petroleum Corporation (GNPC) holds 13.75% equity.
"I hope we put this resource to good use," Ghana's ex-president, Jerry Rawlings, said when production began on 15 December. "At the same time, we should not over-rely on this resource and neglect other areas of economic activity like other countries have done," he added.
The oil find has sparked intense interest from foreign investors, including China. Hopes are high, but it is tempered by a fair amount of realism. Most people seem to understand that oil revenues would not change the country overnight. The government is currently negotiating a multi-billion-dollar loan for infrastructural development, using the oil as collateral. This has raised keen debate in the country, with many people against using oil as collateral.
Ghana has a growing and vociferous civil society which is anxious to ensure that environmental and other concerns receive attention in the oil-producing area. According to one civil society activist: "A lot of fishermen are already moving away from the area of the oil rig; they cannot fish within a certain parameter, so alternative sources of livelihood should be provided to assist them."
Ironically, fuel prices went up by 30% on 4 January 2011, much to the chagrin of the people. President Mills said the increase was not an easy decision but the government could no longer subsidise fuel prices. This, however, ran counter to his 2008 election promise to reduce fuel prices when he came to power. Some experts say the nation will have to produce about 200,000 bpd before the people can enjoy lower fuel prices. That is a long way to go.
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|Title Annotation:||OIL & GAS|
|Author:||Gyasi, Stephen, Jr.|
|Date:||Feb 1, 2011|
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