Opinion: Ghana must ensure oil benefits country

TAKORADI, Ghana — A digital sign in the lobby of Tullow Oil’s office here reads 61 days — a countdown to the country's first first oil.

In November, Ghana will begin producing from its estimated 1.6 billion barrels of oil reserves.

As oil workers prepare pipes for deepwater installation at the port of Takoradi, and the Ghanaian government passes legislation regulating the oil, Ghanaians are wondering whether the oil will benefit them.

To manage its oil industry responsibly, the Ghanaian government needs to slow down and make sure it has a strong regulatory framework in place. As Ghana comes close to becoming one of Africa's oil producers with the offshore Jubilee Field, what progress has been made to see that the petroleum is a boost to Ghanaians and not a curse? What steps are being taken to protect Ghana's environment?

Many of Ghana’s coastal communities are dependent on fishing. Regardless of any revenue-sharing agreement that is developed by the government, these communities need the ocean to remain clean and safe for their livelihoods.

With the recent Deepwater Horizon spill in the Gulf of Mexico, the world is all too aware of the dangers of deepwater oil extraction. Ghana has made progress on legislation to regulate the petroleum industry and manage oil revenues (though this legislation has not yet been passed by parliament). However, environmental regulation still lags behind, and Ghana's Environmental Protection Agency lacks the technical expertise to adequately monitor the oil and gas sector.

Further, the Environmental Protection Agency is under-resourced. If it wants to investigate rig activities, for instance, it must hire a helicopter from an oil services company to fly it out to the offshore rigs. The Jubilee Field sits roughly 75 nautical miles offshore, which is at least a full day trip in a boat, or a 45-minute helicopter ride. A recent spill of oil-based mud by Kosmos Energy, for which the company is in the process of being fined, was reported to the agency by coastal fishermen.

The fact that Ghanaian fishermen reported the spill at all is quite surprising. Though Tullow Oil has held community consultations, and the Ghana National Petroleum Company (GNPC) has also held workshops on the oil in the Takoradi area, most fishermen have little knowledge of what is happening offshore.

“Only about 1 percent of fishermen know what is going on with the oil,” says Ed-Love Quarshie, secretary of the Line Hook Canoe Fishermen Assocation in Sekondi, Takoradi’s sister city. “These forums and workshops should happen at the beach where the fishermen are.”

The Ghanaian government has banned fishing within 500 yards of the oil rigs, a source of tension with fishermen, who say that fish are attracted to the rig’s lights. Fishermen do not know where they aren’t allowed to fish, and there are no buoys or markers in the water to indicate a no-fishing zone, according to Quarshie.

Ghana’s coastal communities want assurances from the government that they will receive a percentage of the oil revenues to compensate them for the impact the oil industry could have on the ocean’s health. The government is planning to channel a percentage of its oil revenues into a revenue-sharing fund called the Ghana Petroleum Fund, but the details of how that money will be allocated is yet to be determined.

Local leaders are hopeful, but cautiously so.

“There have been so many promises that the oil will be used wisely,” says Awulae Annor Adjaye III, paramount chief of the Western Nzema Traditional Area—Beyin. “Those of us that know things don’t always go the way they should go, we are staying on our toes.”

Adjaye, a former teacher who trained in governance and negotiation, is developing a proposal for the Ghanaian government to start a petroleum college in his district, as well as four ICT centers. He believes that in addition to providing training for oil work, it’s important to develop industries downstream that can provide youth employment, including hospitality services.

Even if the proposal is approved, such educational centers will take years to build.

Meanwhile, Tullow Oil is speeding along toward producing its first oil in Ghana. It claims the Jubilee Field is the fastest development of deepwater oil pumping in the world. While lightning-fast development benefits the oil companies, it is of dubious benefit to the Ghanaian government, which would be better off with time to implement new regulations for the petroleum sector, as well as to build up the technical capacity within its environmental agency to monitor the oil companies.

In late July, Tullow Oil discovered another significant oil field at Owo, which could be as large as the Jubilee Field.

Ghana will need to manage the oil industry for decades to come. Slowing down the process will increase the likelihood that the oil will be the blessing so many Ghanaians want it to be.