Oil Over Troubled Waters

In 2007, Tullow Oil and associate Kosmos Energy discovered substantial petroleum reserves in the Jubilee area 37 miles off the coast of Ghana. Oil production began in December 2010, attended by relatively inflated expectations of sudden wealth for this quickly creating West African country. As Christiane Badgley says in one of her many authoritative articles on Ghana’s oil industry, nothing seems to capture the public imagination like oil.

U-tube heat exchangerMany Ghanaians who have been working in Nigeria’s petroleum trade are returning house to Takoradi, Ghana’s “oil city” at the center of the growth. The Ghana Oil and Fuel Service Providers Association has estimated that a healthy downstream sector (refining crude oil and producing oil derivatives) might create a hundred,000 jobs. However, the upstream trade (oil exploration and production) is a specialised space that requires a comparatively small number of highly expert personnel.


Ghana’s 2011 oil manufacturing of 85,000 barrels per day (bpd) fell wanting the goal of a hundred and twenty,000. The exact causes for the underperformance stay unclear, but at a conservative oil price of $eighty five per barrel, the shortfall has resulted in a lack of $3 million a day of potential income. Despite this, Tullow’s CEO Aidan Heavey is firmly against attempting to hurry manufacturing, stating that the earliest date for hitting the target is the primary quarter of 2013.

While Tullow manages the Jubilee discipline, the Ghana Nationwide Petroleum Firm (GNPC) is answerable for harnessing pure gas. Tullow has demonstrated its deftness in developing the oil field, however the GNPC has failed to establish the required infrastructure for pure gas. It is a critical challenge for Ghana, which plans to make use of natural fuel to generate electricity. The nation’s electricity demand has outstripped the entire output of its existing hydroelectric plants.

In the intervening time, Ghana receives much of its fuel from the West African Gasoline Pipeline, however the availability is inadequate to satisfy Ghana’s needs. The Enterprise & Monetary Times studies that Ghana has this month “reverted to electricity rationing” as a result of unreliable Nigerian fuel provides. Ghana’s notorious electricity cuts are more than simply an annoyance. They negatively impression companies, lots of which are obligated to install expensive onsite generators to choose up the slack when a power failure happens.

Local Content material

“Native content” refers back to the diploma of participation of native Ghanaian expertise and enterprise within the oil and gas industry. In its Local Content material Policy Framework, Ghana’s Ministry of Vitality states that the government’s coverage goal is to “give first consideration to Ghanaian unbiased operators within the award of oil blocks, oil subject licenses, [and] oil lifting licenses.”

Amid a worry of “going the way of Nigeria,” where fierce conflict in the Niger Delta has raged for many years, Ghanaians are displaying clear signs that they wish to be in charge of their nation’s destiny and care deeply about how multinationals like Tullow and Kosmos Energy exploit their oil. At petroleum boards just like the annual Oil & Gasoline Convention & Exhibition, there are requires native content and resistance to the “invasion of overseas service providers.” Some critics query why the government shouldn’t be being extra aggressive than its said purpose of securing ninety % of oil-associated jobs for Ghanaians by 2020. Francis M.Ok. Sallah, a excessive-ranking petroleum trade unionist, thinks that expert Ghanaian laborers reminiscent of welders and pipe fitters might fill half of these positions right now. Edwin Van-Otoo, vice president of the Ghana Oil and Gas Service Suppliers Association and a veteran of oil operations within the United States, has strongly admonished Ghanaians to take control of their nation’s natural resources, which include gold and now oil.

Tullow itself makes a public present of encouraging the development of local expertise in Ghana. CEO Aidan Heavey points out that it benefits not only Ghana however makes financial sense for the corporate as nicely. A non-public job-training firm called Sigma-Base Technical Companies trains Ghanaians in skills resembling electrical work. Based on Sigma’s director Ebow Haizel-Ferguson, who returned to his hometown Takoradi after working for more than 20 years in the Niger Delta, Ghana must aggressively develop the downstream facet of the business with a purpose to create important numbers of jobs. Even if Ghanaians ultimately exchange all of the expatriates now working offshore, jobs on the rigs will stay comparatively limited and will not considerably have an effect on the region’s excessive unemployment fee.

It stays to be seen whether or not speak of local content by the Ghanaian authorities and personal oil corporations is anything more than lip service.

Environmental Worries

On November three, 2011, fishermen in the neighborhood of the Jubilee oilfield noticed an oil slick floating towards land. The following day, the dark, sticky material coated the beaches of several fishing communities and seafront resorts, but the event created barely a ripple within the national information. The government made little remark and did not provoke an official cleanup. The scenario is the living nightmare of environmentalists, who’ve all along contended that development of the Jubilee field was rushed via with little regard for the potential environmental influence. Christiane Badgley states that, in effect, the World Bank contributed hundreds of thousands of dollars to the Jubilee mission whereas characteristically ignoring the looming environmental dangers.

Kosmos Energy acknowledges spilling toxic drilling mud on three occasions in the course of the Jubilee area improvement, including a spill of some 25,000 gallons in December 2009. Ghana does not have satisfactory offshore monitoring for spills or clear-lower legal guidelines to sanction offenders. However, in February 2012, parliament started to consider the Marine Pollution Invoice. That is definitely a step in the fitting direction, but environmentalists hope that concrete motion will comply with.

The Western Region’s coast, off which Tullow’s oil drilling platform operates, boasts a wealthy assortment of marine wildlife. Although even many Ghanaians usually are not aware that dolphins populate the nation’s offshore waters, the existence and sightings of dolphins are well documented. Unfortunately, some species are endangered.

Various lifeless whales have washed ashore within the Western Region since 2009, together with seven in 2010 alone. Although some hyperlink these deaths to oil production in Jubilee field, Ghana’s Environmental Protection Company asserts that there is no such thing as a proof to ascertain the connection.

Discriminatory Practices?

In the first of a three-part sequence, award-successful journalist Kweku Owusu-Peprah interviews Ghanaian oil workers who claim that they are paid substantially lower than their expatriate counterparts and are denied company perks reminiscent of free housing supplied to staff from abroad. One worker described separate, more luxurious dining amenities for expatriates who complain that Ghanaian dishes have a disgusting scent. Weatherford, a global oil companies company working in Ghana, is one firm accused of giving preferential remedy to its expatriate workers.

Discrimination against Ghanaian employees is of course unethical and towards the law. It is tough to say simply how broadly it is practiced by foreign oil and gas firms in Ghana. They’re no less than on paper prohibited from participating in any discriminatory apply on grounds of race, nationality, or gender within the situations provided for personnel. What occurs in actual life may be a unique matter.

There is a multi-directional tug of conflict in Ghana’s petroleum industry among the Ghanaian government, the multinational oil firms, the residents of the country, and the surroundings. Like most contests, it is unlikely that they may all be winners. Ghanaians within the homeland and abroad concern that the country and the setting will be the eventual losers and that the dreaded specter of another Niger Delta looms.

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