Oil Over Troubled Waters

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

Many Ghanaians who have been working in Nigeria’s petroleum industry are returning residence to Takoradi, Ghana’s “oil metropolis” at the middle of the growth. The Ghana Oil and Gas Service Providers Affiliation has estimated that a wholesome downstream sector (refining crude oil and producing oil derivatives) might create a hundred,000 jobs. Nevertheless, the upstream trade (oil exploration and manufacturing) is a specialised space that requires a comparatively small number of highly expert personnel.


Ghana’s 2011 oil production of eighty five,000 barrels per day (bpd) fell in need of the target of 120,000. The exact reasons for the underperformance stay unclear, however at a conservative oil worth of $eighty five per barrel, the shortfall has resulted in a loss of $3 million a day of potential income. Despite this, Tullow’s CEO Aidan Heavey is firmly against attempting to hurry production, stating that the earliest date for hitting the goal is the primary quarter of 2013.

While Tullow manages the Jubilee field, the Ghana National Petroleum Company (GNPC) is in control of harnessing pure gasoline. Tullow has demonstrated its deftness in developing the oil discipline, however the GNPC has failed to determine the mandatory infrastructure for natural gasoline. It is a serious subject for Ghana, which plans to use natural gasoline to coal generate electricity. The country’s electricity demand has outstripped the entire output of its current hydroelectric plants.

At the moment, Ghana receives much of its fuel from the West African Gasoline Pipeline, but the availability is insufficient to meet Ghana’s needs. The Enterprise & Financial Occasions reports that Ghana has this month “reverted to electricity rationing” on account of unreliable Nigerian gas supplies. Ghana’s infamous electricity cuts are more than just an annoyance. They negatively impact companies, lots of that are obligated to put in expensive onsite generators to select up the slack when a power failure happens.

Native Content

“Native content” refers to the diploma of participation of local Ghanaian expertise and enterprise within the oil and gasoline business. In its Local Content material Coverage Framework, Ghana’s Ministry of Energy states that the government’s coverage goal is to “give first consideration to Ghanaian unbiased operators in the award of oil blocks, oil field licenses, [and] oil lifting licenses.”

Amid a worry of “going the way in which of Nigeria,” the place fierce conflict within the Niger Delta has raged for decades, Ghanaians are exhibiting clear signs that they need to be in charge of their nation’s destiny and care deeply about how multinationals like Tullow and Kosmos Power exploit their oil. At petroleum forums like the annual Oil & Gasoline Convention & Exhibition, there are calls for local content and resistance to the “invasion of overseas service suppliers.” Some critics question why the federal government isn’t being extra aggressive than its stated objective of securing ninety % of oil-associated jobs for Ghanaians by 2020. refinery petroleum Francis M.Okay. Sallah, a excessive-ranking petroleum commerce unionist, thinks that expert Ghanaian laborers such as welders and pipe fitters might fill half of these positions proper now. Edwin Van-Otoo, vice president of the Ghana Oil and Fuel Service Providers Affiliation and a veteran of oil operations within the United States, has strongly admonished Ghanaians to take management of their nation’s natural assets, which embody gold and now oil.

Tullow itself makes a public show of encouraging the development of local expertise in Ghana. CEO Aidan Heavey factors out that it advantages not solely Ghana however makes economic sense for the company as well. A private job-coaching firm known as Sigma-Base Technical Providers trains Ghanaians in expertise reminiscent of electrical work. In response to Sigma’s director Ebow Haizel-Ferguson, who returned to his hometown Takoradi after working for greater than 20 years within the Niger Delta, Ghana must aggressively develop the downstream aspect of the industry with a purpose to create significant numbers of jobs. Even when Ghanaians eventually replace all of the expatriates now working offshore, jobs on the rigs will remain comparatively restricted and will not considerably have an effect on the area’s excessive unemployment fee.

It remains to be seen whether or not talk of native content by the Ghanaian government and personal oil firms is anything greater than lip service.

Environmental Worries

On November 3, 2011, fishermen in the neighborhood of the Jubilee oilfield noticed an oil slick floating toward land. The next day, the darkish, sticky materials coated the beaches of several fishing communities and seafront inns, however the occasion created barely a ripple within the national information. The federal government made little comment and didn’t initiate an official cleanup. The state of affairs is the living nightmare of environmentalists, who have all alongside contended that growth of the Jubilee discipline was rushed through with little regard for the potential environmental impression. Christiane Badgley states that, in effect, the World Financial institution contributed thousands and thousands of dollars to the Jubilee venture while characteristically ignoring the looming environmental risks.

Kosmos Vitality acknowledges spilling toxic drilling mud on three occasions in the course of the Jubilee area development, including a spill of some 25,000 gallons in December 2009. Ghana doesn’t have sufficient offshore monitoring for spills or clear-lower legal guidelines to sanction offenders. Nonetheless, in February 2012, parliament started to contemplate the Marine Pollution Bill. That is certainly a step in the right direction, but environmentalists hope that concrete action will comply with.

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

A variety of lifeless whales have washed ashore within the Western Region since 2009, including seven in 2010 alone. Though some hyperlink these deaths to oil manufacturing in Jubilee discipline, 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 3-part sequence, award-winning journalist Kweku Owusu-Peprah interviews Ghanaian oil employees who claim that they’re paid substantially less than their expatriate counterparts and are denied company perks similar to free housing supplied to employees from abroad. One worker described separate, more luxurious dining services for expatriates who complain that Ghanaian dishes have a disgusting odor. Weatherford, a worldwide oil providers company operating in Ghana, is one company accused of giving preferential remedy to its expatriate staff.

Discrimination against Ghanaian staff is after all unethical and against the regulation. It is troublesome to say simply how extensively it is practiced by overseas oil and gasoline companies in Ghana. They’re at the very least on paper prohibited from partaking in any discriminatory apply on grounds of race, nationality, or gender in the situations supplied for personnel. What occurs in actual life could also be a distinct matter.

There is a multi-directional tug of war in Ghana’s petroleum business among the Ghanaian government, the multinational oil companies, the citizens of the country, and the environment. Like most contests, it is unlikely that they’ll all be winners. Ghanaians within the homeland and abroad concern that the nation and the atmosphere would be the eventual losers and that the dreaded specter of one other Niger Delta looms.

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