Ghana's Oil Going The Way Of Gold

They sang chorus, Methodist hymns and danced to the surprise of onlookers when President John Evans Atta Mills, of blessed memory turned the valve on an offshore platform to signify the commercial production of oil and gas in commercial quantities in the Jubilee field of Cape Three Points in the Western Region of Ghana.

It is situated in the Deepwater Tano and West Cape Three Points blocks of the Tano Basin, which is one of the three offshore sedimentary basins in Ghana. The field is jointly owned by a consortium of companies called Jubilee Joint Venture and managed by Tullow Ghana Ltd, a subsidiary of UK-based Tullow Oil Plc.

Other five members of the consortium are - Kosmos Energy, Anadarko Petroleum, Petro SA and the state-owned Ghana National Petroleum Corporation (GNPC), which discovered the Jubilee field in 2007 at the time Ghana was marking its 50th anniversary. It was hoping to produce 55,000 barrels of oil per day (bpd), increasing to 120,000 barrels in six months. It currently produces 100,000 barrels of oil per day (bpd).

President Mills, who on that fateful 15th December, 2010, wore safety gear and blue overalls to open the valve in a televised ceremony some 60km off the coast, from the town of Takoradi, was expected to earn more revenues for the development of the country.

Without doubt, Ghanaians welcomed the news, as it could enhance revenue generation and job creation, and significantly improve the national economy.

At the time of chalking that feat, Ghana did not have most of its laws in place to properly manage the new oil and gas industry.

That development made many people, including experts, economists and civil society actors to worry that Ghana would be afflicted by the "resource curse" which faces resource endowment countries in Africa.

The "resource curse" often marked Africa's oil and mining industries: decades of extraction that often saw only a few getting richer but the majority getting poorer, economic distortions caused by improperly managed resource wealth and hardly any money set aside for times when commodity prices dip or the wells dry up.

For Ghana, examples of such problems are very close to home. Nigeria, its West African neighbour and the continent's largest oil producer saw successive governments deplete the estimated $400 billion earned from crude oil sales since the 1970s.

Besides, Ghana's own record in managing mineral revenues after a hundred years of gold mining is nothing to write home about.

UNMET EXPECTATIONS

After the oil find, Ghanaian expectations were that their economic woes were over, as the cost of living and doing business in the country were going to be improved.

But four years down the lane, these expectations are dimmed. The better living conditions, jobs, good infrastructure promised them by the government and the oil companies are yet to be materialised.

ECONOMIC AND SOCIAL CHALLENGES

With the surge in oil production activities in Ghana, previously lowly twin-city, Sekondi-Takoradi, has become one of the most sought-after towns in the West African country.

Because most oil activities are centred in this Western Region city, which is located about 225km from the capital, Accra, many speculators have poured into the town with the hope that when the country's 1.5 billion oil bubble finally bursts, they would tap in on the abundant moneys stashed in this 'black gold'.

'The people's expectations were so high. In the last four to eight years since the discovery of oil there has been an influx of people into the Sekondi-Takoradi metropolis. People thought that when the oil starts flowing they would just line up with jerry cans, get oil and then go and swim in money,' an opinion leader in the area, George Arthur stated.

'Since oil was discovered here in 2007, the social status of the metropolitan assembly has completely changed. There are several economic and social impacts,' he added.

The residents of the oil city- Takoradi, the Western regional capital, however, said the oil find has aggravated their living conditions to a point that they could no longer bear.

Although poverty statistics are hard to come by, the prevalence of poverty in the region and the country at large is noticeable to even first-time visitors to the region or the country.

A retiree, Kwaku Essien, who turned to taxi cab driving to eke out a living, said 'The oil city tag is just a name. We are not benefiting from the oil production'.

Before we were thinking that our young ones would have gotten jobs from the multinational oil firms such Tullow, Hess Petroleum and Kosmos among others, but they were yet to be employed, he stated.

Mr. Essien, who drove this journalist around Takoradi, indicated that life in the city used to be 'sweet'. Now, prices of basic commodities are astronomically high which most residents cannot afford, according to him.

An assembly member of the Sekondi -Takoradi Metropolitan Assembly (STMA), Sampson Nimako Darko added: "The oil find has made life more unbearable for the people of Sekondi-Takoradi residents from rent to prices of goods and services".

Residents in the major cities in the region, including Takoradi and Sekondi, have witnessed

traffic congestions since the commercial production of oil. This is caused by the influx people who trooped to the region in search of oil jobs, he told The Chronicle. As, Mr. Darko put it: "Traveling in the region is more frustrating than in Accra, Ghana's capital city".

The number of oil firms and other businesses which opened offices in the two cities mentioned above because of the oil resource cannot be counted. These oil firms in particular use heavy duty vehicles on the roads in the region to transport goods including oil waste within the region.

While the other businesses which engage in light work also share the limited roads in the region with other motorists thereby causing damage to the roads.

This, Mr. Darko said, further worsened the road infrastructure situation in the metropolis and the region as a whole, which depends largely on the central government funds to undertake development projects.

After causing damages to the roads and other infrastructure, these oil firms, including Tullow Oil Plc, Kosmos Energy, Anadarko Petroleum, Petro SA and the state-owned Ghana National Petroleum Corporation (GNPC) do not pay taxes to STMA, according to him.

Additionally, rental accommodation has shot up to the level that many residents, especially the young graduates can no long bear. As a result of this unfortunate development most young people in the so-called oil city are being accommodated by their relatives and friends.

The owners of the houses are reallocating their houses to expatriates working at the Jubilee field at highly exorbitant fees that local or indigenes cannot afford.

Some of house owners have their homes re-constructed as offices for potential occupants, many of whom are expatriates and other local consultants or workers of the oil field and its related businesses.

Hakim Mahama, who lives around the Takoradi Zongo area, told the newspaper that since the discovery of the oil, some tenants have been thrown out of their homes by greedy landlords and ladies.

He explained: "These greedy landlords and ladies forcefully reject their tenants and give their properties to expatriates who virtually invaded and took over the twin-city".

However, government is yet to act on the plight of its people, who are constantly being rejected by house owners, who are cashing in on the booming oil business at the expense of the ordinary Ghanaian.

Besides, the newspaper gathered the general living conditions in the twin-city had risen to an all time high, with prices of goods and services going above 200%.

A worker of the Ghana Ports and Harbours Authority, Samuel Darko, said an ordinary fante-kenkey was sold above GH¢1. Before the oil discovery, we were buying the same kenkey for 40 pesewas, he stated.

A road side fried rice (check check) which goes for GH¢2 in Accra, is selling at GH¢5 in Sekondi-Takoradi and its environs, according to Madam Patience Korkor, a teacher at one of the Senior High Schools in the metropolis.

For the imported goods, because of the steep depreciation of the cedi (Ghanaian currency), their prices have shot up to 300%.

Apart from the astronomical high living conditions, nationals from Nigeria, Togo, Ivory Coast and Chinese among others, have invaded the area and further make lives difficult for the indigenes.

To Be Continued.....