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Tuesday, January 11, 2011

Ghana Oil too much pessimism

Background and Basic Facts about oil in Ghana
Fact 1: On December 15th 2010, Ghana entered into a totally new economic phase: pumping the black gold- oil.
Fact 2: Gasoline (petrol) pricing has always been the driving force behind the escalating cost of living in Ghana, and around most parts of the world.


Fact 3: Most Ghanaians have been excited about our newfound oil deposits, and dreaming this could be the answer to our poverty.

Fact 4: In spite of our excitement, there is a strong negative feeling about what oil is going to do for our country. These negative reactions cannot be brushed off because of the propensity of our leaders to hoard the oil wealth for themselves due to their greediness, selfishness, irresponsibility, corruptness, and failure to be accountable – thus our pessimism.

Fact 5: As of now, Ghanaians have not been specifically informed about how much revenue our country will receive from the oil contract(s).

Fact 6: According to the Business Analyst (12/23/2010) Kosmos Energy, the technical operator, holds 23.49%. Tullow Oil, the lead-operating partner, holds 34.70%, Anadarko will have 23.49%, the Ghana National Petroleum Corporation (GNPC) will have 13.75%, Sabre Oil will have 2.81%, and the E.O Group will have 1.75%. What these percentages translate into and how they were arrived at, has never been fully disclosed and/or explained to us, Ghanaians.

Fact 7: There are 3 types of oil contracts that are being used all over the world.

A. Concession: The Foreign Oil Co (FOC) secures a concession to explore and pump oil and gas. Under this concession contract, the host country (e.g. Ghana) has no right apart from royalties it will receive based on production, which is difficult to verify (Kwawukume – 7/14/10 – GHP). If Ghana has this type of contract, we can never take advantage of rising oil prices.

B. Joint Venture: The host country (e.g. Ghana) shares costs with the Foreign Oil Co (FOC) and then split the profits. But the FOC is in total control of production.

C. Product Sharing: The host Country (e.g. Ghana) grants the FOC rights to develop oil field and pump the oil and gas. Under this agreement, the host country (e.g. Ghana) and the FOC, both control production and share the oil.

We have tried to simplify these types of oil agreements for easy understanding by all.
However, the type of contract (concession, joint venture, or product sharing), that the
Ghana government has signed, has not been fully disclosed.

Responsibility and Accountability

As Ghanaians, we demand to know from our Government the type of contract(s) it has signed. Our government needs to exhibit and continue to practice strong democratic institutions and a record of transparency, responsibility and accountability to show that it respects the will of Ghanaians, which it governs by consent and not coercion. Fundamental to realizing this culture of transparency and participation is the legal right of the people of Ghana to access information produced by the government and relevant them. Unfortunately, Ghana currently lacks the vital access to Freedom of Information, which are a fundamental human right and the touchstone for all freedoms because without information, we, Ghanaians, do not have full control over our lives. And a barrier is formed between “the ruler and the ruled, and the principles of dignity and equality that form the basis of international human rights law are undermined”.

Unfortunately, oil production already has started. However, better late than never we have to be aware that oil production has only started at the Jubilee Field and there are new oil fields being discovered. If our bargaining position was weak then, we are now strong and in a better position to sign future agreements that will be beneficial to the people of Ghana.

We, Ghanaians for the Accountable government (GhAG), have decided that before the oil becomes a curse, as Ghanaians have rightly been afraid of, we want our citizenry to be wide-eyed and demand accountability from the government. This demand should be totally devoid of partisanship – NPP, NDC, CPP, etc. Our governments now and then have clearly demonstrated that they are corrupt. Corruption, insincerity, irresponsibility and lack of integrity have been our biggest problem. We should not sit down passively and let the politicians and crooked businessmen “eat” the oil revenues.

Our Demands

Ghanaians for Accountable Government (GhAG) and the people of Ghana demand answers to the following questions:

A. Which type of the above agreements (Concession, Joint Venture, or Profit Sharing) did
our government sign with the Foreign Oil Co.?

B. What percentage of the oil revenues will be due to the people of Ghana?

C. What are the projected dollar figures for this percentage?

D. Who controls the production figures and how will the figures be verified?

E. What decision(s) has/have the government of Ghana made in the disbursement of the oil
revenues to the various programs in Ghana to benefit its people?

F. What safety measures are in place to deal with oil spills, if any should happen? And how will responsibility and accountability be determined?

G. What environmental safeties are in place to protect the land and people of Western region and subsequent regions where oil is discovered, produced, refined and/or stored?

GhAG needs the people of Ghana to support us and demand answers from the government. There has been too much “lip-talk” about transparency, responsibility and accountability by the government. Let us put these principles in action. We sing, “yen ara ye asaase ni...” in the hope that all Ghanaians will benefit from the fruits of the land that was secured through the blood of our ancestors for us [their children and our children and generations to come].

There is too much poverty in our midst even though Ghana has tremendous natural resources. Ghana is structurally in a much better shape than most African countries. Unfortunately our leaders leave a lot to be desired. We have to start holding them accountable at all times and not only during elections. “We shall drown if we remain passive and watch our ship sink in front of our very eyes”.

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