African oil: blessing or curse?

eople in Ghana don’t really know what to expect from oil companies that are jockeying for position on the West African nation’s Atlantic…

eople in Ghana don’t really know what to expect from oil companies that are jockeying for position on the West African nation’s Atlantic coastline.

But they know they don’t want to end up like Nigeria.

Kosmos Energy, a US exploration firm, struck oil about 63 kilometres offshore from Cape Three Points in southwest Ghana in late June.

The Dallas-based company leads a consortium of business groups that includes the Ghana National Petroleum Corporation, which holds a 10 per cent stake in what reporters are calling “commercial quantities” of light crude estimated at 600 million barrels.

The tribal chief at Cape Three Points was “overjoyed” at news of the strike, according to media reports.

Now maybe the government will build a road to the local village, Ahanta, Nana Akye Kessie V told the Daily Guide newspaper.

“Our forefathers had slept in the dark, died and gone. We have also been sleeping in it for years.

“For goodness sake, we entreat this government to connect electricity to our village before this big project takes off.”

Drawing from both Christian and animist traditions, Kessie prayed God would “make the discovery this time a reality.”

He recalled similar rumours 20 years ago of oil and gas wealth that never materialized.

Wary of false hope Kessie poured a libation last week — an offering of liqueur to the gods to bring good luck.

“Our ancestors and the gods of the land and sea will heed our prayers.”

Meanwhile Ghanaians in the capital, Accra, debated the merits of the fossil fuel industry.

Some, such as President John Kufuor, heralded the oil strike as the ultimate tonic for Ghana’s struggling economy and persistent energy crisis.

“We’re going to really zoom, accelerate, and if everything works, which I pray will happen positively, you come back in five years and you’ll see that Ghana truly is the African tiger,” Kufuor told the BBC.

“My joy is that I’ll go down in history as the president under whose watch oil was found to turn the economy of Ghana around for the better,” he said.

“Oil is money, and we need money to do the schools, the roads, the hospitals. If you find oil, you manage it well, can you complain about that?”

Yes, apparently you can. Informed Ghanaians condemned the oil discovery as a vector for corruption.

“Corruption had been a major feature in oil production in Nigeria, Gabon and Angola,” said Accra local Kofi Manu. “What is the assurance that Ghana would not go the same way?”

Cooler heads advised caution.

“They must make sure the areas the oil is taken from are the initial beneficiaries,” said Kofi Bentil, a Ghanaian business analyst who sat as a panelist on a weekend radio show.

“Do things which will diffuse aggression.”

Neighbouring Nigeria was touted by everyone as the example not to follow.

Nigeria is the world’s 12th largest producer of crude oil, according to the Organization of Petroleum Exporting Countries.

Exporting oil is the main driver of Nigeria’s gross domestic product worth $188.5 billion, the highest West Africa, which is arguably the world’s poorest region.

Yet the country suffers from a crippling electricity shortage worse than Ghana’s, and the Niger Delta has long been a hotbed of sabotage, kidnapping and extortion.

“We found repeated incidents in which people were brutalized for attempting to raise grievances with the (petroleum) companies; in some cases security forces threatened, beat, and jailed members of community delegations even before they presented their cases,” Human Rights Watch, an international non-profit organization, said in a 1999 report.

“Successive governments have misspent the oil wealth which the oil companies have helped to unlock, salting it away in foreign bank accounts rather than investing in education, health, and other social investment, and mismanaging the national economy to the point of collapse.”

Following Nigeria’s conversion to democratic rule in 2000, oil workers in the delta have been kidnapped and pipelines have been exploded.

Most recently a tentative ceasefire has settled between militant rebel groups and corporate security forces since Nigeria’s new president, Umaru Yar’Adua, released a high-profile rebel leader from prison last week.

Even though oil production in Ghana is at least three to five years away, Ghanaians need safeguards against corruption and to know what royalties they’ll receive in return for risking such civil conflict.

“What is not clear is what share of the proceeds will go to Ghanaians,” said Humphrey Boateng, a marketing executive with an environmental consulting firm.

“With mining I am told it is less than 10 per cent,” Humphrey said in an interview.

“It is difficult to know what our politicians intend.”

Kosmos and its key partners, Tullow Oil and Anadarko Petroleum Corp., have an opportunity to start fresh and responsibly develop offshore oil along the West African coast.

Hopefully the oil companies and the Ghanaian government won’t squander it.