Ghanaian Ownership Of Oil & Gas Industry

Indications from the recent Ghana Oil & Gas Career Fair 2013, put together by the Ghana Oil Club, World Business Magazine, and Hired Capital, seem to suggest a very serious and regrettable misconception as to what owning the oil and gas industry means. And the misunderstanding appears to be at the highest levels of our civil/public services.

According to a report in B&FT, a business weekly, “participants at an Oil and Gas Career Fair in Accra have agreed that for Ghana to take ownership of the fledgling oil and gas industry, the country would have to invest massively in building the capacity of its citizens.

“Dr. Paul Frimpong, Director of Petroleum at the Ministry of Energy and Petroleum, admitted that the quantum of local participation, as well as the extent to which local people can participate in the oil and gas sector is limited in respect to technology, finance and human resources.

“The onus then, is on the nation to adequately and holistically empower its indigenous people, through the formulation of good policies to facilitate a progressive involvement of the people, and that is why an event such as this is very important,” he said.

“Dr. Paul Frimpong indicated that the government is doing everything in its power to ensure that citizens gain from the oil and gas sector. The Local Content Policy, he said, is expected to drive the sustainable development of the sector, and win for Ghanaians a controlling stake … “

The first paragraph of the newspaper report maybe the reporter’s understanding of the of the conclusions of the career fair and may be overlooked, but surely not the fourth paragraph, in which a director in the ministry seems to suggest that the implementation of the local content policy would win Ghanaians “a controlling stake” in the oil and gas industry.

The Chronicle finds incredible this perception of equating the number of Ghanaians working in the oil and gas industry to Ghanaian ownership of the industry. We are the first to admit that we are no economists or captains of industry.

But, our layman’s understanding of a controlling state is that the person, who holds such a stake in any industry, takes home the greatest share of the profits of that industry. Given the nature of the agreement our government signed with Tullow, even if all 25 million Ghanaians work in the oil and gas industry, our share of annual profits would be less than 20 percent, which is our current stake in the Jubilee fields. By no stretch of imagination can less than 20 percent shareholding amount to a controlling stake, when the total number of primary stakeholders is just two or three.

We stand to be corrected. But, with the short-sighted sale of Ghana’s Golden Share in the former Ashanti Goldfields, the major income the government derives from that company now is corporate taxes. We have no share in profits. Yet, thousands of Ghanaians work there. We have no equity there at all, talk less of a controlling one.

Let the position of The Chronicle in this matter not be misconstrued. We are for as many Ghanaians, as are qualified, working in the oil and gas industry. We, therefore, support all programmes that would impart the necessary oil and gas industry skills to Ghanaians. It would no doubt improve their personal economies and those of their extended families.

What The Chronicle finds abhorrent is any suggestion that because Ghanaians work and earn a living in the oil and gas industry, Ghana, as a nation, holds a controlling stake (equity) in the industry. Such thinking would encourage our civil and public servants to continue to give Ghana atrocious oil deals like the first signed between the Government of Ghana, and the finders of our first commercially viable oil well in 2007 or thereabouts.

Our beloved Ghana deserves nothing less than a 30 percent stake in oil finds in this country by foreign prospectus, and the government in power should be told that clearly, and forcefully.

Actually the equity stake we want in our oil and gas industry is 100 percent. The Chronicle, therefore, calls on the Ghana National Petroleum Company to get serious with its exploration function, and give Ghana full ownership in as many commercially viable wells as possible.

The deluge of mouth-watering promises by the various political parties, whether for a Better Ghana or to Move Ghana Forward, can only be achieved with adequate funding. With the current structural defects in our economy, the oil and gas industry is the only place such funds can be found. We should, therefore, not allow misconceptions or lethargy stand in our way.

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