As Ghana begins oil production, Ghanaians worry about 'oil curse'
Although Ghanaians are excited by commercial oil production, there is concern that Ghana isn't prepared to handle oil revenue properly.
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State-owned Ghana National Petroleum Corp. and the government are “expecting to do technical exploration in the Voltarian basin so that in the next five to 10 years we can start doing oil production on shore,” Asaga said. The region stretches from the south along the Volta River to the north of the country, along its border with neighboring Togo, according to the GNPC’s website.
The Africa Report: Ghana Special – Oil & Corruption
How to avoid the oil curse: This time it must be different. That is the oft-heard demand from activists, politicians and business-people when discussing oil’s potential in Ghana. The discovery of the Jubilee field – with about 1.8 billion barrels – is different from its African counterparts. It is the first time substantial amounts of oil and gas have been found in one of Africa’s established democracies. Estimates on the quantum of Ghana’s oil wealth vary hugely. The common starting point is that Jubilee will produce about 120,000 barrels per day and some $1.2 billion in government revenue a year for 20 years.
The adjacent Tweneboa field is reckoned to be as big as Jubilee’s, but industry experts forecast the biggest finds will be onshore in the Keta basin. With companies like Exxon Mobil, BP, ENI and Sinopec vying to buy equity in the Jubilee field, the assumption is that Ghana has several billion barrels of reserves. A key imperative, according to the World Bank’s Sébastien Dessus, is revenue transparency. That means signing up to full disclosure under the Extractive Industries Transparency Initiative and working with civil society groups on the analysis of contracts and the monitoring of environmental impact. Then there are the corrosive effects of revenue accruing to an over-centralized government. Worst of all is the ‘Dutch disease’, under which the currency appreciates as oil revenues flow. Bank of Ghana Governor Kwesi Bekoe Amissah-Arthur says he is determined to hold down the value of the cedi against the US dollar to maintain the competitiveness of exports.
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