ONE YEAR OF OIL EXPLOITATION: AT THE CROSSROADS.
3/22/2012 1:35:25 PM -
I have had various responses to my articles on the exploitation of the Jubilee field, including an unsigned one to my latest article which exemplifies the mode of thinking of the powerful elite, both national and foreign, and the rationalization they use to justify why Ghana, even though being the owner of the oil and gas fields worth over $150 billion, and a country which had spent millions of dollars on seismic surveys and mapping leading to the discoveries, should accept the raw deal of a pittance of 20 billon dollars compared to those who only invested less than $4 billion in the extraction process. Also, just like the privately aired rationalizations of our national elite in charge of accepting the raw deal - perhaps, not confident of the genuineness and soundness of their apologia for the pathetic subservience to foreign capital – the response was not put in the public domain on the web for public reaction but e-mailed privately. I am however putting my reply to them and the Ghanaian elite and populace alike who think like them on the web, for the discerning public to see through the confidence mechanisms employed to subjugate the developing peoples to unequal and unfair exploitation by Western interests with the active support of their national elite. In their thinking, we must even be grateful that the foreigners have chosen to invest in exploiting our oil and gas reserves and the little we get is more than enough compensation, as we did not invest any money in the extraction of the oil and gas! I'd like to quote in full the response in question, protecting the source though:
“We are very appreciative for your article on the Jubilee Field. It is very possible that the
project can be losing money, (1) financier's have to be paid up front for at least 5 to 8 years,
and (2) the production rate fell, and not increased in one year.
GOG was carried on all exploration work (i.e. drilling). Ghanaian workers were trained and
became employed. The mobile refining unit is leased by the Operator, GOG wanted the Operator
to purchase such unit on behalf of Ghana.
Unfortunately, the same time the Jubilee Field activity was ongoing, another project was active in providing a land refining unit at Sekondi, various forces did not see a need for such project. The Project was approved by the EPA and Energy Commission, and GOG saw no need to provide a "Bank Guarantee". (stresses included)
The President of Ghana also talked to the Queen on various issues in Ghana at the same time (newspaper). The Elected Officials, felt the British and Americans were footing the entire bill for the Jubilee Project.
Now the Elected Officials want to expose the British/American firms to the people, there some things should not be mentioned at this time, but the people were never consulted through two (2) Presidential Administrations on the Jubilee Field.
GOG used the Nigerians as consultants, and Nigeria is having financial problems in its oil and gas industry.
We are very happy Ghana has been able to start an oil and gas exploration industry, but one cannot do it with a minimal investment and expect maximum profit to the Country. There are no negative comments, and we do not have any for Ghana.” (all stresses original)
Firstly, I believe the author/s are foreigners, presumably British, hence the concern about my mentioning the British Monarchy in my article. The fact remains that the British Monarchy, even if now a constitutional monarchy, has over the centuries supervised the looting of the Gold Coast and other former dependencies to the present day. The British in collaboration with our strong tribal kingdoms were the major benefactors of the capture and sale of able men and women into slavery in the Americas in the past for pittances. During the colonial period, the British fraudulently exploited our gold and other minerals without adequate and equitable compensation in the name of investment with the backing and support of the British Monarchy in whose name the British Empire was formed. The visit of Princess Anne to Tullow's facility offshore is thus, indeed, an expression of tacit support of the Monarchy and the British government to another round of plundering our natural resources in the name of investment to the benefit of the British and the American capitalist classes, and their countries' treasuries. Since the gaining of our flag independence and neo-colonial statuses, the Americans have of course been increasing their role in the African sphere to partake in the exploitation of Africa's resources, alongside with her European imperial allies such as Britain and France.
Of course, these things could not happen in isolation, but with the support of our chiefs, leaders and technocrats with the carrot sticks dangled before their faces. Now we have oil and gas, a supreme opportunity for Ghana to lift her teeming masses from poverty, and the British and the Americans are at their best with their intrigues, denying us an equitable share in the oil revenue, arguing that Ghana did not put in enough investment. On whose territory is the oil? Is the oil and gas underground estimated to be worth over US$158 billion not enough or adequate owners rights to warrant an equitable share of it than the 20 billion dollars? What moral or ethical and economic justifications do the British and Americans have to justify the right to the bulk of this wealth? Is it the US$ 3.5 billion they have invested to bring out this wealth from our own land? Unfortunately, the Ghanaian elite, the technocrats and political leadership in charge of affairs, think like them, because their rebuttal to my assertions and concern is if the white man did not bring their billions to invest, the oil underground has no such values that I claim it to be. That Ghanaians should rather be grateful to the white man for the 20 billion dollars. They have succeeded in brainwashing the ignorant masses of the people to imbibe and believe in their medieval reasoning to be the truth. God help and grant them a little bit of the Wisdom of Solomon.
I am aware of how the British Parliament passed a law to deny Scotland a fair share of the North Sea oil resources. I am also aware the British with the help of Americans went to war against Argentina over a small island off the coast of that country and within her 200 miles economic zone because of oil. I have been warned by some well meaning Ghanaians within and outside the country about a possible threat to my life for letting the people know the truth. I have been told it is my own fellow Ghanaians who would be hired by the oil mafias of Britain and American to kill me. I am compelled to come out with this information now, as it is not in my interest to keep silent about these things and warnings. Unlike what others think, as stated in the mail above, the general public is not supposed to know some things, hence the secrecy surrounding the agreements signed with the oil companies. Now the threat is becoming ominous, even from fellow Ghanaians who do not understand me and my political affiliation. It is disheartening to observe the few who understand the dismal state into which we have been led are gripped with fear into silence! They say look at what Shell did in Nigeria! If they have nothing dubious or unfair to hide, why should such Agreements remain hidden from public scrutiny? You see, fellow Ghanaians, such Agreements are coerced from us by virtue of the superior forces backing them, just as the colonial treaties obtained by gun boat diplomacy, e.g., the involvement of the British Ambassador in the GT Vodafone fraudulent sales agreement.
The Presidents of Ghana, past and present, could be talking to the Queen, who they regard as their Goddess and pray to in order to have favours. They cannot look straight into the eyes of the Queen and tell her the truth, that her country Britain and America had unfairly plundered our gold and other minerals resources far too long, and that Ghana deserves a fair and equitable share of proceeds accruing from these minerals but not the crumbs because we are fed up with the unequal and non-reciprocal relationship we have with them.
Our leaders still have a pre-1960 colonial mentality and therefore most knew next to nothing about the modern trend in the upstream oil and gas industry; that was why they have committed blunder and plunged Ghana into another round of massive economic exploitation by the British and Americans. The justifying but hollow confidence mechanisms and gimmicks, like a bowl of apples and carrots placed before them, are simply rationalizations from the garbage can of excuses for exploitative systems. The concern that some elected officials were trying to expose the “British/Americans firms to the people” is simply an admission of the guilt and fraud being inflicted on us, which they do not want the public to know. Yes, we are yet to be fully acquainted with the terms of the agreements signed with the oil companies but we the people have the right to know! Where is the transparency? I am not an elected official, but an ordinary Ghanaian on retirement but do not even earn a pension salary but have the knowledge and want to share it with my people to raise their awareness and consciousness about what is happening around them.
On the question of employment, the oil companies cannot employ workers from the moon, or all the workers from Britain or America, because it would be too expensive to do so, therefore it is no point. The laws of the land which often the foreigners flout would not allow it anyway. In any case, GNPC under Tsatsu Tsikata had sent scores of Ghanaians to Libya and Angola to acquire skills in oil drilling and it is just right that these people should be given work related to the Jubilee Field and other areas of activity.
It is the normal practice in the Upstream Industry that the host government is carried along during exploration, whether under the Production Sharing or Royalty Tax Agreement. Should the host government decide to participate that interest is paid for. GOG carried out the initial surveys and mapping and some drillings (leading to discovery of vast gas deposits) in order to determine where the oil deposits are before Tullow, Kosmos and others came in to start drilling to assess the presence of oil and commerciality.
The FPSO is not a refining unit to the best of my knowledge, but the people have been made to believe it is through blatant misinformation, and we see one more repetition of that misinformation in the above quote.
On the question of GOG refusal to grant a bank guarantee to one of the foreign companies to use to secure a loan to build an oil refinery at Sekondi, which will not be owned by Ghana, just like Valco was not until the NPP regime purchased its hollowed shell, it was in the right direction. Does such a transaction make an economic sense to anyone, after the experience with Valco? EPA and Energy Commission approval of it is no point. Would such a transaction take place in any Western country?
On the claim of GOG using Nigeria consultants to fashion out such dubious and fraudulent agreements that one cannot find in today's world to effectuate such huge collateral damages on their neighbour is surprising to me, as I am not aware of it. But if indeed it is true, those Nigerians are not worth their salt. In any case, I do not believe Nigerians who had experienced the drawbacks, limitations, exploitative and fraudulent nature of the Royalty Tax System and had since changed to the Production Sharing Agreement would advise Ghana to tread the perilous path that, initially created lots of problems in their Upstream Industry. Currently Nigerians do not impose royalties but take 60% of total oil revenue and petroleum profit taxes under their Production Sharing Contracts (Agreement). In addition, all oil fields are owned by NNPC and managed on behalf of the Federal Republic for Nigerians. So, with the striking of oil in Ghana, there should have been no indecent haste to award oil blocks to other foreign companies on the same detrimental terms as given to Tullow and Kosmos, with the catch of 1 or 2% shares for cronies and frontmen to be carried on as partners!
Now, how come a project that has achieved 60% gross sales returns on total capital investment in the first year of operation declaring losses? Are they saying because financiers have to be paid within 5 to 8 years and production rate fell, that accounted for the losses? I do not need to work as a Financial Analyst at the London Stock Exchange, Wall Street of New York, IMF nor in the World Bank in order to tell all that they are wrong and are not being truthful. Financial Analysts in these institutions would agree with me that they are not right. What is the expected Yearly Gross Rate of Returns on the project? What is the amortization period of the Capital investments? What is the interest rate on capital?
The projected life period of Jubilee fields is 20 years and 60% returns on capital in the first year, and it is claimed losses could be made, hence their refusal to pay taxes, after having shortchanged Ghana on her share of oil liftings? Their expenses were perhaps doctored or gold plated. If at the average rate of 60% per year, within 5 years between 3.5 to 5 times of the capital outlay would have been recouped and paid leaving huge surpluses. Messers Tullow and Kosmos, after financiers have been paid off, how do we share the revenue? If the answer is no change, then I can readily conclude that it is a complete daylight robbery of our oil resources under the gunboats of Uncle Sam which now sail along our coastal waters.
They are happy and do not have negative comments for Ghana because they have succeeded in influencing our uninformed leaders by dangling apples and carrots before them into signing dubious and exploitative agreements tying our hands behind, with 1 or 2% shares to cronies planted as shareholders who were also carried, by the way, while they plunder and rob us of our oil and gas resources in the name of investments. Yes, they do not have any negative comments for Ghana because they have succeeded in gagging the ignorant young men and women at the Press and Radio houses from reporting any negative things about them. There is clearly a conspiracy with the powers that be to deliberately misinform the people of Ghana about what is going on.
The Queen is happy and has given her explicit support by allowing Princess Anne her daughter to be sent on an inspection tour to the facility offshore. Equally, the British government is in support and Uncle Sam's gunboats are lurking around in our waters to intimidate us. All of them can afford to be smug and dandy about Ghana because it is all packaged, sealed and handed over to them in a golden barrel by our uninformed, short-sighted and self-seeking so-called leaders without a fight! The forefathers of some of us who ruled in parts of present Ghana only capitulated after putting up stiff fights against far more superior imperialist forces with their local allies. We are fed up with the subservient mentality of our so-called leaders since Osagyefo Dr Kwame Nkrumah was dastardly overthrown by the forces of imperialism and neo-colonialism! Fellow Ghanaians, wake up! The time for a major paradigm shift has dawn upon us, as we stand at the crossroads in Ghana's chequered development!
The writer, a retired accountant, is a social commentator and activist. He is author of the book “Ghana's Oil and Gas Discoveries: Towards Full Maximum Benefits,” Printer Excell Limited, P.O. Box NT272, New-Town, Accra. On sales at Methodist Book Depot, Accra and some selected venues. Copies can be procured directly from him.