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3rd August, 2010
IS PETROLEUM A BLESSING OR A CURSE?
I see that a deluge of flak is falling over Ghana’s infant petroleum industry.
This is as it should be: petroleum is a national asset that can transform our country’s coffers from being nearly empty to being almost full. And because the asset belongs to all of us, we are all interested in how the income from the asset will be distributed.
Frankly, it is an indication of the manner in which this country has gradually descended into financial fascism that we know so little about those who are going to, or are exploiting the petroleum deposits, what our Government’s share will be, and how that proportion was arrived at.
Isn’t it amazing that it took a series of political insinuations to ferret out a couple of Ghanaian names associated with Kosmos, the company which brightened our faces by announcing a find called ’Jubilee’?
And isn’t it shameful that it was only when Kosmos announced it was going to sell some of its holdings in assets belonging to all of us, that we began to learn that it had apparently had access, for some time, to information collected by our own national oil corporation?
Such a cynical approach to an industry as politically-sensitive as petroleum is self-defeating. For in the current atmosphere, the public does not believe anyone at all.
Even as prestigious an institution as Forbes magazine, whose estimates of what rich people and companies are supposed to own, are accorded near-biblical authority, has been found wanting whilst commenting on the Ghana economy, just because it appeared, however tenuously, to be linked with a campaign to twist the arm of the Ghana Government, to make it change its position regarding a petroleum transaction.
It is to be hoped that the unpleasantness that has surrounded the oil industry in Ghana -- to the extent that the integrity of the US Department of State, or its visa-issuing arm -- was impugned by innuendo, will persuade our Government to torpedo the long-held tradition by which Ghanaian administrations have regarded information on national economic matters as a state secret.
If there happens to be an oil spill (God forbid) it is not ONLY people who have access to international finance capital who will pay a dear price, but poor fishermen, the dependants of poor fishermen and those who earn a meagre living by servicing the tourist industry (such as it is) who will be unable to lift their hands to their mouths any longer.
The stupidity of the idea that any group of people or even individuals can corner a national asset with as high a profile as petroleum and gas, is beyond belief. Yet an attempt is made to do just that.
In the early 1970’s, we had a company called “Agri-Petco” making noise about finding oil around Saltpond. Up till today, I don’t know who brought Agri-Petco to Ghana. I don’t know when they left Ghana either, and exactly why they left.
We all assumed that they hadn’t been able to realise the amount of oil from their wells that they had announced they would be able to bring up.
Were they right? Were they wrong? We didn’t know. We didn’t even know whether our Government had the capability to cross-check the information they made available to it.
When I talk about economic fascism, people might think I am using too strong a term. But I am not: I remember that during 1979, when we were rationing petrol in Ghana, Agri-Petco was carrying on exporting its crude oil abroad, in precisely the way it had done before we ran out of petrol.
We assumed that they were doing that because the agreement the Ghana Government had signed with them gave them the right to export their crude, irrespective of what was happening in Ghana.
But apparently, the crude they were getting from their well or wells in Ghanaian waters wasn’t suitable for our refinery at Tema. Or so I was told recently by someone who added that Tema uses heavy crude, whereas the Agri-Petco stuff was light.
I accepted that explanation because the person who offered it ought to know. On the face of it, one should question the authenticity of the information, because we buy crude from Nigeria, and most of Nigerian crude is also light! It is ‘Bonny light.’ Admittedly, Nigeria also produces
Brass River, Qua Iboe, and Escravos blend, among others.
But even today, do we, as members of the public, actually know the type of crude we get from Nigeria? I don’t think so. Shouldn’t we have been told, at the time Agri-Petco was around, why we weren’t getting any of its crude? Apparently our Government didn’t think it necessary.
What if we worried our heads about why we were exporting oil when our refinery’s tanks were empty? It is the Government’s business, not ours. Or more precisely, it is Tema Oil Refinery’s business. What if Tema Oil Refinery belongs to all of us?
The same cavalier attitude was taken by the Nigerian Government towards the petroleum industry, which is its biggest foreign exchange earner and also the greatest contributor to national income. Until recently.
The new Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, is trying to get a “Petroleum Industry Bill” passed by the National Assembly, which will unify all the many laws (at least 16 at the last count) governing the industry in Nigeria and bring as much transparency into the industry as possible.
In fact, the “objectives” of the Bill are to bring “transparency, accountability & good Governance” into the petroleum industry of Nigeria. It will create an open framework by eliminating confidentiality of:
•All texts of licenses, leases, contracts and amendments;
•Amounts of revenue payments to government by individual companies;
•All geological, geophysical, technical and well data; and
•Production, lifting/quantities, and values lifted.
The Bill also contains stringent guidelines that will protect the environment from oil spills and other forms of degradation. In an interview with CNN in London, Mrs Alison-Madueke acknowledged that about nine million barrels of oil may have been spilled in the Niger Delta, dating back “to 1938 when oil exploration and production started”.
The spills were due mainly to “piracy and misapplication of the country's laws,” she said. "We have seen so many pirates. The militancy in the Niger Delta obviously created problems.
There was piracy in terms of bunkering but there may have been some misapplication of laws over the years.”
“As we see it now,” she affirmed, these things have become “a thing of the past, because we are implementing extremely stringent laws, processes and procedures, and to ensure that environmental degradation is addressed in time and is effectively remedied".
The Minister expressed the hope that the Petroleum Industry Bill would be passed “in the next four to five weeks,” adding that the Government was trying to persuade the National Assembly to sacrifice its August recess and pass the Bill.
The Government wanted to address “not only the issue of environmental degradation but also [to] ensure greater equity and participation of the Niger Delta communities in the oil and gas sector.
The Ghana National Assembly ought to send a delegation, accompanied by oil industry officials, to Nigeria to listen to the Nigerian National Assembly debates on the issue. Fir it is the fool who says “it only concerns my neighbour but not me.”
It took Nigeria over 30 years of unconcern to come to the realisation that even the apparently supine populace could take only so much of cheating and thievery and that after a while, it would react.
If Ghana does not know, it ought to realise soonest that the Nigerian situation is a rehearsal of what could be waiting for us. Yet the other day, on Canadian television, some businessman in Takoradi was seen boasting that “oh, the type of situation in Nigeria cannot happen in Ghana.”
How does he know? Hmmm -- to be forewarned is to be forearmed.
This is as it should be: petroleum is a national asset that can transform our country’s coffers from being nearly empty to being almost full. And because the asset belongs to all of us, we are all interested in how the income from the asset will be distributed.
Frankly, it is an indication of the manner in which this country has gradually descended into financial fascism that we know so little about those who are going to, or are exploiting the petroleum deposits, what our Government’s share will be, and how that proportion was arrived at.
Isn’t it amazing that it took a series of political insinuations to ferret out a couple of Ghanaian names associated with Kosmos, the company which brightened our faces by announcing a find called ’Jubilee’?
And isn’t it shameful that it was only when Kosmos announced it was going to sell some of its holdings in assets belonging to all of us, that we began to learn that it had apparently had access, for some time, to information collected by our own national oil corporation?
Such a cynical approach to an industry as politically-sensitive as petroleum is self-defeating. For in the current atmosphere, the public does not believe anyone at all.
Even as prestigious an institution as Forbes magazine, whose estimates of what rich people and companies are supposed to own, are accorded near-biblical authority, has been found wanting whilst commenting on the Ghana economy, just because it appeared, however tenuously, to be linked with a campaign to twist the arm of the Ghana Government, to make it change its position regarding a petroleum transaction.
It is to be hoped that the unpleasantness that has surrounded the oil industry in Ghana -- to the extent that the integrity of the US Department of State, or its visa-issuing arm -- was impugned by innuendo, will persuade our Government to torpedo the long-held tradition by which Ghanaian administrations have regarded information on national economic matters as a state secret.
If there happens to be an oil spill (God forbid) it is not ONLY people who have access to international finance capital who will pay a dear price, but poor fishermen, the dependants of poor fishermen and those who earn a meagre living by servicing the tourist industry (such as it is) who will be unable to lift their hands to their mouths any longer.
The stupidity of the idea that any group of people or even individuals can corner a national asset with as high a profile as petroleum and gas, is beyond belief. Yet an attempt is made to do just that.
In the early 1970’s, we had a company called “Agri-Petco” making noise about finding oil around Saltpond. Up till today, I don’t know who brought Agri-Petco to Ghana. I don’t know when they left Ghana either, and exactly why they left.
We all assumed that they hadn’t been able to realise the amount of oil from their wells that they had announced they would be able to bring up.
Were they right? Were they wrong? We didn’t know. We didn’t even know whether our Government had the capability to cross-check the information they made available to it.
When I talk about economic fascism, people might think I am using too strong a term. But I am not: I remember that during 1979, when we were rationing petrol in Ghana, Agri-Petco was carrying on exporting its crude oil abroad, in precisely the way it had done before we ran out of petrol.
We assumed that they were doing that because the agreement the Ghana Government had signed with them gave them the right to export their crude, irrespective of what was happening in Ghana.
But apparently, the crude they were getting from their well or wells in Ghanaian waters wasn’t suitable for our refinery at Tema. Or so I was told recently by someone who added that Tema uses heavy crude, whereas the Agri-Petco stuff was light.
I accepted that explanation because the person who offered it ought to know. On the face of it, one should question the authenticity of the information, because we buy crude from Nigeria, and most of Nigerian crude is also light! It is ‘Bonny light.’ Admittedly, Nigeria also produces
Brass River, Qua Iboe, and Escravos blend, among others.
But even today, do we, as members of the public, actually know the type of crude we get from Nigeria? I don’t think so. Shouldn’t we have been told, at the time Agri-Petco was around, why we weren’t getting any of its crude? Apparently our Government didn’t think it necessary.
What if we worried our heads about why we were exporting oil when our refinery’s tanks were empty? It is the Government’s business, not ours. Or more precisely, it is Tema Oil Refinery’s business. What if Tema Oil Refinery belongs to all of us?
The same cavalier attitude was taken by the Nigerian Government towards the petroleum industry, which is its biggest foreign exchange earner and also the greatest contributor to national income. Until recently.
The new Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, is trying to get a “Petroleum Industry Bill” passed by the National Assembly, which will unify all the many laws (at least 16 at the last count) governing the industry in Nigeria and bring as much transparency into the industry as possible.
In fact, the “objectives” of the Bill are to bring “transparency, accountability & good Governance” into the petroleum industry of Nigeria. It will create an open framework by eliminating confidentiality of:
•All texts of licenses, leases, contracts and amendments;
•Amounts of revenue payments to government by individual companies;
•All geological, geophysical, technical and well data; and
•Production, lifting/quantities, and values lifted.
The Bill also contains stringent guidelines that will protect the environment from oil spills and other forms of degradation. In an interview with CNN in London, Mrs Alison-Madueke acknowledged that about nine million barrels of oil may have been spilled in the Niger Delta, dating back “to 1938 when oil exploration and production started”.
The spills were due mainly to “piracy and misapplication of the country's laws,” she said. "We have seen so many pirates. The militancy in the Niger Delta obviously created problems.
There was piracy in terms of bunkering but there may have been some misapplication of laws over the years.”
“As we see it now,” she affirmed, these things have become “a thing of the past, because we are implementing extremely stringent laws, processes and procedures, and to ensure that environmental degradation is addressed in time and is effectively remedied".
The Minister expressed the hope that the Petroleum Industry Bill would be passed “in the next four to five weeks,” adding that the Government was trying to persuade the National Assembly to sacrifice its August recess and pass the Bill.
The Government wanted to address “not only the issue of environmental degradation but also [to] ensure greater equity and participation of the Niger Delta communities in the oil and gas sector.
The Ghana National Assembly ought to send a delegation, accompanied by oil industry officials, to Nigeria to listen to the Nigerian National Assembly debates on the issue. Fir it is the fool who says “it only concerns my neighbour but not me.”
It took Nigeria over 30 years of unconcern to come to the realisation that even the apparently supine populace could take only so much of cheating and thievery and that after a while, it would react.
If Ghana does not know, it ought to realise soonest that the Nigerian situation is a rehearsal of what could be waiting for us. Yet the other day, on Canadian television, some businessman in Takoradi was seen boasting that “oh, the type of situation in Nigeria cannot happen in Ghana.”
How does he know? Hmmm -- to be forewarned is to be forearmed.
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