Oil and gas sold short
FROM QUIET BEGINNINGS, with first oil from the Tullow-run Jubilee field in December 2010, policy-makers in Ghana’s petroleum industry spoke of fending off the threat of the ‘resource curse’. International experts descended on Accra, advising that Ghana should choose ‘Norway over Nigeria’ when it came to a development strategy. It hasn’t worked out like that. Jubilee’s development was marred by a dispute over preferential terms given to Kosmos Energy in partnership with two minority shareholders from the New Patriotic Party (NPP), the ruling party at the time. Government revenue from oil and gas amounted to $444m in 2011; it was up to $541m the following year. Stagnation followed, due to high exploration costs and political uncertainty. Oppositionists accused John Mahama’s National Democratic Congress (NDC) government of negotiating its own opaque deals and rushing through the Petroleum (Exploration and Production) Act in 2016 on terms that left Ghana with less than 20% of total oil and gas revenue. The launch in August 2016 of Tweneboa Enyenra Ntomme in Tullow’s Deepwater Tano block seemed to offer a revenue boost. Negotiations on the Eni/vitol-backed Sankofa oil and gas field, on the other hand, were shrouded in controversy. Industry experts said Ghana, advised by the International Finance Corporation (IFC), had mishandled the negotiations for the $7.9bn deal. The new NPP government promised to renegotiate the deal but no details have emerged in public. The latest venture, Springfield, in the West Cape Three Points block, is exciting Ghana’s industry-watchers. It is managed by the young oil trader Kevin Okyere, known for his deals in Nigeria in the era of oil minister Diezani Alison-madueke, and is the first exploration site wholly owned by Ghanaians.