Feature: Can Ghana Survive The Oil Boom Or Doom?

We appear to be elated at the fact that Ghana has found oil. But to all intents and purposes we may be living in a fool�s paradise as there are certain challenges that most Ghanaians may not be aware of. For instance, the much advertised training programs in the so-called Oil & Gas sector may not ensure the expected employment. And if Ghana persists along the usual course with which we do things, the �last bastion of hope� may be lost to us as a country although there is still a chance for us to reap meaningful benefits for our suffering country folk. But, our official must develop policies from the right premise and our Politicians must defer to technocrats when it is proper to do so and not resort to grand-standing or �playing to the gallery�. Unrealistic Expectations The misconceptions surrounding the �oil find� need to be dispelled in good time to avoid raising unnecessary expectations. The masses must have the leadership they can rely on; for if the masses have no leader, they become akin to literally removing the leading letter from the word masses. There is nothing wrong if people want to position themselves strategically in order to reap the benefits of a good business-line but it is important not to raise false hopes and have mass hypnosis based on illusions. Ghana cannot afford this. The government and politicians must begin to measure their utterances and start watering down expectations to prevent despondency. I say this because of the ease with which mediocrity sometimes passes for competence where there is relatively high illiteracy on a subject. Under such circumstances, it is probably worse to be semi-literate or half-baked than to be totally ignorant on the subject matter as the ignorant ones are more submissive to tuition than the masquerading �scholar� who, although knows next to nothing, is the loudest. Such persons mostly tend to use big words or terminologies out of context to mask their inadequacy. They come with borrowed words they themselves obviously struggle to understand. I am told of one such �scholar� who habitually used big words he lacked schooling on and which eventually cost him dearly. He engaged a Doctor in an argument and would not heed wise counsel to relent but insisted on being castrated. He only realized belatedly that the big word he should have used was �circumcised�. I have watched and listened to the buzz made on Ghana�s �oil find� and the apparent mushrooming of �experts� seeking to cut a niche for themselves. I have heard claims on radio from persons proclaiming varied degrees of competence and attempting to demonstrate the ability to provide vital training for the Oil & Gas sector. Obviously, these persons hope to assist in the development of the required human resources to meet the challenging task ahead. Yet, I am beginning to wonder if some of these persons know what they are talking about or know what is at stake in the area they seek to thread. �Oil & Gas� is the phrase currently in vogue and used by those who hope to provide training to prospective job seekers. However, my schooling tells me that the mention of �Oil & Gas� suggests an upstream rather than downstream activity in the petroleum industry. The upstream sector of the industry entails exploring for a prolific field, engaging in its development and managing the producing field and pre-treating the product to specification. My point here is that the upstream sector is a technical area and will not create too many new jobs. Let us remember that the policy that led to the Eastern Scholarship Scheme operated during the PNDC era is what ensured that a lot of Ghanaians were trained abroad and this contributed to the competence of GNPC in the upstream sector. Staff of GNPC had such capability that the corporation used to operate a drillship, the D5-11 and performed upstream assignments internationally such as in Angola, Gabon and Oman until it was sold together with other rigs and vital assets by some politicians. The truth is that the expertise required to operate in this area takes a while to acquire. Indeed, we are at the tail-end of the spectrum and ready for production. A rig owner or the operator of an FPSO will not want recently trained area boys coming on board to �pour� what they have �chewed� in a classroom on his platform. My point is that, not much work can be generated beyond janitorial services and the like. Oh! Let me be charitable. Other jobs will spring up in related services and shore-base activities but these will not amount to much given that operations are largely offshore which necessitates a lot of mechanisation. I keep emphasizing that most people get disappointed in life merely because they fruitlessly fight arbitrary standards they themselves put up but fail to attain. And when reality eventually dawns on them, they either go deep into the Bible or deep into beer. This is an avoidable fate but eludes most because of the failure or reluctance to discern particularly under situations where ignorance is bliss. Possible Way Out The possible area of growth is from the midstream to the downstream sector such as operating a refinery and the related oil marketing services arising thereof. We are all aware of the labour opportunities an institution such as the Tema Oil Refinery (TOR) provides. Aside this, the related shipping and maritime activities are major employment areas. The best opportunity for massive job creation is in the mid-downstream area which could involve terrestrial operations and therefore tends to be relatively accommodative of huge labour. Jobs will exist from the storage of crude oil in tank farms and its marketing and sale as these or in petroleum product marketing, the transportation and the retailing of various products. The capacity created by downstream activity additionally promotes local industry. Further, this sector is more accommodative of new entrants as the training requirements are relatively easier than in, say operating a refinery or a rig. Good housekeeping, an eye for health and safety issues and an adherence to the protocol of custody transfer are all that is required. But, it is the real owner of the oil who will determine the scheme of things and whether there should be shore- based tanks for a shuttle vessel to replenish or whether the crude should be destined to a foreign shore. The vital question therefore relates to who owns Ghana�s oil? Is Ghana just a piper who expects the true owner to call the tune for us to play? But, yes, the investor must recoup his investments but this ought to be done alongside Ghana�s legitimate interests since the two are not mutually exclusive. However, if we operate from the wrong paradigm, and from the condescending notion that we are subservient to the whiteman who knows everything, and without whom we cannot move forward, then Ghana will be electing for an �Oil Doom�. I watched a GTV program this weekend, which was an obvious promo from Kosmos Energy and my heart missed a bit. All those of substance who appeared in the footage were whites except for one. The blacks who showed up were the rough-necks and pipefitters. This is in a country where GNPC has in the past drilled for oil using its workers who were Ghanaians. The Saltpond oilfield is another example. But all of a sudden, Caucasian show up and pontificate to the exclusion of whatever home-grown capacity we have. I find this offensive as it is unrepresentative of the reality and could only set the stage to put Ghana at a disadvantage. Let us remember that the Obuasi mine is physically located in Ghana but is virtually foreign to us. Ghana�s interest in �AGC� is next to nothing in relative terms and the same may apply to the Oil industry. After all, just recently, we could not even protect our �data-room at the GNPC� as it was compromised and exposed to strangers. However, I am sure the current gatekeepers of this national resource are more socialist inclined than some others and so may be merciful unto average person and not operate from a property-owning paradigm. But, one other point of concern is the way the quota system for bringing in foreign expatiates has been abused in the past by some �foreign� companies. Worse still, Ghanaian officials seem to condone this practice and do not seem to realize that when they allow the abuse of the system and jobs meant to be performed by Ghanaians are taken by foreigners, this resultantly affects them. At some of these mines, Caucasian carpenters or junior staff are presented as consultants and given prime salaries and lucrative conditions of service at the expense of local staff.My information is that the said abuse may be rearing its ugly head at this stage of the oil find with expatriate staff reportedly readying themselves to troop in for the spoils. My prayer, however, is that the current government curb this wanton practice lest we lose the economic-security game ab initio. Our policy makers must have faith in indigenous capacity and homegrown skill as Tsatsu Tsikata did when he was in control of the Oil Industry rather than exhibit the usual inferior complex. Consequently, Ghanaians must begin to realize the essence of public participation in governance. We should not leave everything to our politicians to handle as they are sometimes overwhelmed by foreign pressures to tow a particular line they may personally not be happy with. Under such circumstances, the existence of homegrown agitation is of immense value to our politicians since it provides a timely excuse for not compromising. This is demonstrative of the concept of sovereignty and testifies that sovereignty actually resides in the people of Ghana. Ghanaians are the best custodians and protectors of our national resources and it is us who will suffer from nonchalance or tardiness. Legal Regime I was minded to write about the legal implication of oil operations in the country�s 200 mile Exclusive Economic Zone (EEZ) away from the country�s Territorial Sea (TS) which is 12 miles from the baseline (shore). This is because the domestic laws of the country only apply within the TS, subject to innocent passage. Limited rights of the state apply in the12 mile contiguous zone where the state can enforce laws in the four specific areas of pollution, taxation, customs, and immigration. and not in the remaining part of the EEZ as that is controlled a lot more by Public International Law such as the Law of the Sea. Resultantly, serious issues exists as to whether the courts of the Ghana will have jurisdiction if, for instance, oil is stolen from the production platform in the Jubilee Fields. The answer to this and other considerations may influence the decision on whether to insist on the Shuttle Vessel or the FPSO being registered in Ghana in order to overcome certain legal and national security challenges. Of what use is Article 257(6) of the 1992 Constitution if our courts lack exclusive jurisdiction to decide on the crimes or torts committed in the EEZ because of the notions of international law. My training as a chemist, geologist and a lawyer coupled with my experience in the oil industry offers me sufficient perspective on some relevant issues. My personal view is that, by virtue of the said Article 257(6), Ghana must consider following countries like the Argentina, Peru and probably the United Kingdom and declare a 200 mile Territorial Sea in order to give meaning to that provision of our constitution. The current situation under the law seems incongruous because, although the oil and gas within the EEZ is claimed by our domestic law (the 1992 constitution) to be the property of Ghana, we do not have total control of the terrain in which the oil and gas exists since that is regulated under international law. Further, the 1992 constitution, by Article 73, requires our Government to conduct its international affairs in consonance with the accepted principles of public international law and this includes the United Nations Convention on the Law of the Sea (UNCLOS). Further, Ghana is a signatory to the UNCLOS and is therefore bound by international law under the pacta sunt servanda principle, although the UNCLOS is now regarded as a codification of the customary international law. But, this does not provide jurisdiction under our domestic law for our courts to be bound until our parliament says so. Finally, let it be said that the said Article 73 further mandates our government to conduct Ghana�s international affairs in a manner consistent with the national interest of Ghana. I will dare say that there is no greater national interest than the requirement to protect the interest of Ghanaians within the confines of the law rather than pander to foreigners and mortgage our resources away to strangers? There are other sensitive matters such as the authority to protect the vital oil installations from pirates, etc and whether the investor who has an interest in those installations will have the desired confidence in our security men to offer adequate protection. I say so because in recent times, the corrupting influence of the cocaine trade is known to have infected the psyche of our noble services and those entrusted with sensitive information have been known to tip off the criminals they should have apprehended. However, our difficulties should not provide an excuse for allowing the investor to recruit the likes of Blackwater, Executive Outcomes, (or some white-washed mercenary group) to guard the said installations as we may be inviting a Trojan horse. But, I will leave this particular topic for a later article. Conclusion When I used to work in GNPC, disclosures about possible oil discoveries were guarded as the national security implications could be numerous and this ranged from the possible destabilization of the government through to mercenary, economic, social and political factors. We recognized at the time that where information on such matters were not properly managed, this led to avoidable but onerous problems particularly for a country as poor and weak as Ghana. Presently, however, the pressures of party politics make disclosures fly front, back and center. This must stop. We must leave things to the professionals to handle and put the politicians on the back burner.