Ghana's Oil In Danger

By Daily Guide
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By Daily Guide

11/16/2009 9:39:55 AM -

Kosmos Energy, the conglomerate which finally ushered Ghana into the threshold of oil production after many years of futile attempts by others, has been slapped with an accounts and assets freeze by the government, as the fossil energy discovery gets more political, thus jeopardizing the investment climate in the country.

The order, DAILY GUIDE learnt, was passed through the Bank of Ghana, as a raging disagreement between the energy giant and government takes a further dip.

When DAILY GUIDE contacted a deputy Minister of Information, James Agyenim-Boateng, he said he was not aware.

“Where is that coming from? I have no idea,” James said.

However, a source said the directive might have come from the United States Department of Justice who are said to be investigation Kosmos for some undisclosed reasons.

The assets and bank accounts freeze include those of the former Chief Executive Officer (CEO) of Kosmos Ghana, George Owusu; the EO Group, the company that facilitated the entry of Kosmos to Ghana; and a minority shareholder in Kosmos Ghana, Kosmos LLC and other companies, George Owusu.

, MP for Adansi Asokwa and former deputy Energy Minister, asked government to immediately explain the reason for such capricious act, in order to protect the investment climate in the country.

Government and Kosmos have locked horns in recent times over the ceding of the latter's interest in Jubilee 2 Field offshore to Exxon Mobil, the American oil giant, without the approval of Ghanaian authorities.

The argument, which appears to be favouring Kosmos, is that a two and a half month notice was served on government through the Ghana National Petroleum Corporation (GNPC) and the Ministry of Energy, about the arrangement, but with no response forthcoming, Kosmos went ahead to consummate the deal with the US oil giant, Exxon Mobil.

No clause in the contractual deal with Ghana suggests that under such arrangements Kosmos should give preferential treatment to the country, a catch which could open a chapter on a protracted legal battle.

What also worsens the case of Ghana is that the deal entered into with Exxon Mobil is irrevocable and steeped in international law.

Should Ghana persist in its resolve to scuttle the Kosmos/Exxon Mobil deal, a diplomatic row could break out between the US and the country. It is doubtful if the Ghanaian government would be ready for the repercussions of such a diplomatic/business confrontation.

The Mills Administration is longing to have a Chinese group replace Exxon Mobil and ironically, it was the same Asian company which some time back condemned Ghana as not bearing oil.

With no offshore oil exploration and drilling experience, the Chinese appear to be a mismatch for the US company, whose mastery of complex deepwater oil drilling is legendary.

The National Democratic Congress (NDC) government is trying various manouvres, with a view to possibly reversing the Kosmos/Exxon Mobil deal but with the irrevocability of the contract, Ghana might be preparing to jump into a complex international legal minefield.

At a time the country is about to join the league of oil producers, the unfolding legal drama could be presenting her as an investor-unfriendly nation, according to , former deputy Energy Minister who was part of the negotiating team at the inception of the oil prospecting contract with Kosmos.

Another aspect of the murky development has to do with the abbreviation E.O. Group (Edusei and Owusu), which the government is not comfortable with.  

When all hopes had been dashed about discovering oil in the country in commercial quantities, it was the E.O. Group which encouraged Kosmos to come to Ghana.

Kosmos had earlier discovered oil in commercial quantities in the Equatorial Guinea, and the E.O. Group thought the conglomerate could spring a surprise in Ghana too.

Ever suspicious about a possible former President John Agyekum Kufuor linkage with the Kosmos operations, the NDC government is fighting tooth and nail to make things impossible for the E.O., which company was established long before the country's oil discovery.

DAILY GUIDE has reliably learnt from a source that government thinks that the E.O. Group is fronting for former President Kufuor, hence the harassment of George Owusu in the past few months.

Matters got to a head for George Owusu last week when the freeze order was relayed to him, after a siren-blaring police convoy had picked him up and drove him to his office and home for a thorough search.

The two locations were searched and the hard-drives in his personal computers and documents removed to perhaps isolate tell-tale data which could buttress the suspicion of a Kufuor/Kosmos deal.

Hon. has sneered at the unfolding development, describing it as inimical to our quest to attract investors to the country.

“It has a potential of causing massive friction and if it happens, Ghana will be a big loser,” he said.

According to him, for Kosmos' entry into the oil industry, Ghana would still be wandering in search of oil.

It would be recalled that when he headed the Ghana National Petroleum Corporation (GNPC), Tsatsu Tsikata had on the payroll about 700 personnel.

When the New Patriotic Party (NPP) took over power, it moved to reduce the number to, as it were, get GNPC to concentrate on its core task of exploring for oil and nothing else.

This was the time when George Owusu, who has worked with respectable international oil firms for many years, decided to convince Kosmos to pitch camp in Ghana and try the offshore exploration approach.

There is a touch of vindictiveness and arm-twisting in the unfolding development, political observers have whispered.

, in a continuation of observations on the subject under review, queried what GNPC is doing in Sierra Leone, having been spotted in this West African country in recent times.

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