Ghana's Oil

a test to see if the resource curse can be avoided

Odum field confirmed, block ownership shares

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Just in case you forgot, there’s more than just the Jubilee field. Yesterday, Kosmos Energy (one of the main firms offshore Ghana and currently selling its share in the Jubilee field) confirmed discovery of the second of its four offshore oil discoveries, this one in the Odum field, next to the Jubilee field. These fields are distributed across two blocks, the unit of concession for oil.

Via Rigzone:

Kosmos Energy is the operator of the West Cape Three Points Block in which the company holds a 30.875% interest. An affiliate of Anadarko Petroleum Corporation has a 30.875% interest; an affiliate of Tullow Oil plc has a 22.896% interest; the EO Group has a 3.5% interest; Sabre Oil & Gas has a 1.854% interest; and GNPC has a 10% carried interest.

Kosmos holds an 18% interest in the Deepwater Tano Block. An affiliate of Tullow Oil plc operates the block with a 49.95% interest. An affiliate of Anadarko Petroleum Corporation has an 18% interest; Sabre Oil & Gas has a 4.05% interest; and GNPC has a 10% carried interest.

Note that good industry news comes through Rigzone–I recommend searching with keyword Ghana for a list of recent related news.

Written by jasonized

10 December 2009 at 7:25 am

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India-China resource competition to come?

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From the WSJ/Mint (an India-based news source):

India scouts for Africa hydrocarbon stake

New Delhi: State-owned Oil and Natural Gas Corp. Ltd (ONGC) and GAIL (India) Ltd are in talks with Ghana National Petroleum Corp. (GNPC) for acquiring stakes in hydrocarbon blocks in the African country.

GNPC wants to buy Kosmos Energy Llc’s stake in the Jubilee field and then sell it to firms such as ONGC and GAIL.

In an attempt to check China’s growing influence in Africa and provide a fillip to India’s efforts to secure hydrocarbon assets in the continent, around 23 African countries have been invited to participate in the second India- Africa hydrocarbons conference, being held by the petroleum and natural gas ministry in association with the Federation of Indian Chambers of Commerce and Industry.

The current breakdown of Jubilee field ownership:

  • Kosmos Energy LLC (US) owns a 23.49 percent stake (currently up for sale)
  • Tullow (EU) holds a 34.7 percent interest
  • Anadarko Petroleum Corp (US) controls 23.49 percent
  • Ghana National Petroleum Corporation holds 13.75 percent
  • Sabre Oil & Gas (US) owns 2.81 percent
  • EO Group (Ghana) has 1.75 percent

The story of competition for natural resources in Africa between India and China is not new, although Ghana’s oil development could invite this dynamic home. It will be interesting to see if a sovereign entity will be allowed to purchase a stake in the Jubilee field–and what that might mean for Ghana’s foreign relations–although it seems that private firms will still dominate the field.

Written by jasonized

7 December 2009 at 7:29 pm

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Oxfam: Develop institutions before developing oil

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Back in February 2009, Oxfam and ISODEC (Integrated Social Development Centre) together released the first major report outlining a basic approach to avoid the resource curse: slow down oil development until Ghana’s institutions can catch up. Their recommendations focus on a few major principles:

  • Transparency: disclose development plans, contracts and licenses, revenue; set up auditing procedures; reject confidentiality agreements
  • Negotiation: moratorium on new exploration licensing; open, competitive bidding; involve more than one agency; build government familiarity with oil industry operations and terms
  • Management: create a single fund for revenues, establish rules and accounting controls; integrate with national budget; prohibit oil-backed loans; put under parliamentary oversight
  • Mediation: inform fishing communities, create participatory process for affected communities; set up compensation scheme for loss of use of seas

Given the continual projections that drilling is to begin in mid-2010, it’s unclear whether the Ghanaian government will have sufficient time to develop the competency, capacity and structures necessary for dealing with Jubilee field oil projects in a way that avoids the resource curse. I’d be curious to hear if there’s a one-year follow-up being prepared–what progress has been made?

It seems that the most powerful thing outsiders can do is 1) push for transparency and 2) build competency among Ghanaian civil society. In a Q&A conducted with the authors of the report, skill-sharing among journalists was suggested several times; apparently, the NGO Publish What You Pay is reportedly doing this.

Between reports of Nigerian militants contacting Ghanaian fishing communities and Nigerian journalists sharing knowledge with Ghanaian journalists, it seems that the cross-national ties between these two countries is about to get a lot thicker…

Written by jasonized

5 December 2009 at 9:19 pm

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Could Niger Delta militants visit Ghanaian communities?

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From the Accra Mail:

A respected legal practitioner and lecturer at the University of Ghana, Law Faculty, Dr. Raymond Atuguba has chillingly revealed that militants in the Niger Delta region, notorious for blowing up oil pipes, kidnapping and demanding huge ransoms and causing unrest in the oil rich Nigerian region have started tripping to Ghana in droves.

He said, when he visited the Western region a few weeks ago, he discovered that “groups there were already creating linkages with groups in the Niger Delta”. According to him, the people were “preparing to create the same amount of chaos we have in the Niger Delta if we neglect their concerns.”

Granted, the news reporting is decidedly thin (single witness, zero corroboration) and no follow-up stories have appeared about this otherwise startling development, so I’m inclined to call this a rumor. But what a rumor! It raises the question: will Ghanaian communities adjacent to oil facilities create cross-national links with similarly-sited Nigerian communities? This is either a vicious rumor or a fantastic story, and someone ought to look into it. Anyone on the ground in coastal Western Ghana care to chime in?

(hat tip to Ghanalinx)

Written by jasonized

3 December 2009 at 9:38 pm

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Jubilee oil field in brief

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Via Crossed Crocodiles, some good summary material on the Jubilee oil field off the Ghanaian coast:

The Jubilee field is one of West Africa’s biggest oil strikes in years, likely containing recoverable reserves of at least 1.2 billion barrels of oil equivalent, with first output scheduled for the second half of 2010.

“The International Monetary Fund predicts government revenues from oil and gas could reach a cumulative $20 billion between 2012 and 2030 in the Jubilee field alone,” a statement issued jointly by the Integrated Social Development Centre (ISODEC) and Oxfam America said.

The Jubilee field, named for the fact that it was discovered in the same year the country celebrated 50years of independence, may reach a production level of 120,000 barrel per day (bpd) by 2011. (Ghana’s current consumption of oil is 40,000 to 60,000 bpd, almost imported.

Depending on oil prices and future production levels, Ghana could soon see more than $1billion added to government revenues each year, according to conservative estimates by the German Technical Cooperation Organisation (GTZ). Even much lower estimates will easily eclipse current revenues from mining (largely gold) exports.

It is important to point out that, Ghana’s life as an oil producer may be relatively short-20-30 years-and the country must move rapidly to beef up its legal and administrative framework to meet the significant managerial, administrative, political, and financial challenges the oil rush presents.

Written by jasonized

3 December 2009 at 8:18 pm

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