Ghana’s oil and gas industry continues to attract key global industry players on the back of sustained investor interest, as well as significant de-risking of the country’s Western Basin.
The ruling of the International Tribunal for the Law of the Sea (ITLOS) in respect of the Ghana – Cote d’Ivoire maritime boundary dispute delivered on September 23 2017 in Ghana’s favour has de-risked the uncertainty of the area and has led to the intensification of exploration by upstream petroleum companies in the previously contested area.
It paved the way for Hess to resume its pre-development activities.
$4.7billion in revenues so far
Total production from inception of oil production to September, 30, 2018 is 242,278,382 barrels, according to data from the Ministry of Finance, while total petroleum revenue received by the government between 2011 and September 2018 is US$4.723 billion.
Contribution to GDP
The contribution of oil to Gross Domestic Product (GDP) has been phenomenal. Ghana experienced one of the strongest growth numbers in the world at 14.4 per cent in 2011, up from 8 per cent in 2010, according to the Ghana Statistical Service (GSS).
Ghana’s GDP growth hit 8.5per cent in 2017, attributed to strong performance in the oil and gas sector as well as significant growth in the country’s industrial sector.
Strategic infrastructural investments
In terms of infrastructure, the country can boast of strategic investments such as the Atuabo gas facility which is now contributing to Liquid Petroleum Gas (LPG) consumption in Ghana.
According to Economist, Prof John Gatsi of the University of Cape Coast, between 60 and 65 percent of domestic LPG consumption comes from the Atuabo gas plant which has a major effect on demand for foreign currency used to import such products into the country.
“It is a remarkable achievement, using proceeds from our petroleum revenues to build the gas plant,” he added,
Provision of jobs, skills training
The Atuabo gasprocessing plant had provided jobs for many within the catchment area, and for both technical and non-technical people in the oil and gas sector. The sector has helped in the training of technical people for the industry, so Ghana can also boast of strategic human resource that should help the country become self-sustainable in terms of our sole engagement in the sector.
Greater demand for transparency, accountability
Prof Gatsi observed that the country had over the years seen greater demand for transparency, disclosure and accountability in the oil and gas sector, noting that “most Ghanaians have become very vibrant and are increasingly demanding accountability and so this is an achievement we can be proud of.”
The work of the Public Interest and Accountability Committee (PIAC) had brought to the fore the negative aspects of the utilisation of oil.
Ghana, he noted has used oil to establish the sinking and contingency funds which have helped to provide buffer for debt management.
Tullow,lead operator says it is working to strengthen and grow its business in Ghana by tapping into additional exploration opportunities. The names of two international oil companies have been submitted to the board of Tullow Oil for consideration as the UK oil explorer seeks partners in a bid to acquire a new oil block in Ghana.
Its managing director, KwekuAwotwe told journalists in Accra recently that some leads had been identified within the Jubilee and TEN fields, which could lead to new discoveries and generation of additional production and revenue for Ghana and other stakeholders.
Due to the failure to manage expectations of the population, it has become increasingly difficult to explain to Ghanaians why the country’s benefit from the exploitation of oil remains small.
“We failed to manage expectations in the oil and gas sector; we failed to provide alternative sustainable livelihood for people affected one way or the other by the oil and gas operations,” Prof Gatsi recalled.
The willingness of stakeholders to be open about the issues of transparency, responsibility, disclosures and accountability which are the pillars of proper petroleum management has been in doubt.
In almost all reports of PIAC, since its establishment, there are challenges of one or more non-existent or poorly executed projects which projects received allocations from the Annual Budget Funding Amount (ABFA).
Governments seem to have found PIAC’s findings and queries uncomfortable. The most recent example is the altercation between the Ministry of Finance and PIAC over someGH₵403million oil money allegedly misapplied by the Ministry.
Even though the Ministry denied the said amount was missing, PIAC insisted the money of unused had to be returned to the Petroleum Holding Fund (PHF) from where it was disbursed.
If the downward trend of crude oil price is sustained, it may negatively impact projected revenues which will adversely affect government revenue and Government’s ability to execute planned programmes of activities.
There was also the wrongful payment of some monies into the accounts of the Ghana Revenue Authority (GRA) which the Authority was finding difficult retuning to the PHF.
Adhering to the rules by stakeholders has become a challenge and such must be tackled speedily.
Investment opportunities, especially in the area of local content and local participation could have been better than what exists now, experts have said.
Many Ghanaians were sent abroad for training in oil and gas courses, only to return and remain jobless.
The way forward
There is the need to step up strategic investment in the sector to increase the stake of Ghanaians in the industry.
Executive Director for the Centre for Extractives and Development, Africa (CEDA), Mr Emmanuel Kuyole maintains that there several job openings for Ghanaians to take advantage of in key sectors of the economy.
He has urged government to identify areas within the mining, oil and gas sectors were jobs could easily be created.
“we need to ensure that the extractive sector is not just about revenues and taxes but that the sector is leveraged upon to improve upon economic development, create jobs and so become one of the levers for pushing government’s industrialisation agenda,” Mr Kuyole recommended.
Prof Gatsi called on stakeholders and duty bearers to strictly adhere to the dictates of the Petroleum Revenue Management Act (PRMA) to improve oil governance and accountability.