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Who wants a financial stake in an oil conflict zone?
E. Ablorh-Odjidja, Ghanadot
There are no ghosts, at least to the naked eye. Perhaps a
disturbance of the sight path, a vibration in the air or a
consequence of a previous action taken can cause your mind to
see things. But when the same happens in the world of economics
and business, the apparition you think you see might be real.
So now, welcome to the pending conflict with the Ivory Coast.
Did we get tangled in the Kosmos/Exxon Mobil transaction at the
wrong time, you ask?
The Ghana/Ivory Coast brouhaha over the oil find in the Western
region may be an example of the consequences of tackling
Exxon-Mobil at the wrong time.
Granted that it is no fault of Ghana's that oil got discovered in
the westernmost part of her borders and not in the middle, we
still have to worry about the latest intention of the Ivory
Coast..
Somebody in Ghana should have known that, before long, Ivory
Coast would stir up trouble because of jealousy, if for nothing
at all. All she would need to start would be some confusion on
Ghana’s part and an offer of some financial gain from an
interested suitor in the border oil pursuit; or start the
trouble on her own in anticipation for one.
It should be recalled that when oil was first discovered in
commercial quantities in Nigeria the thought among many here,
out of sheer envy, was that the pool could stretch as far as
inside the maritime boundaries of Ghana.
Nothing happened to that speculation because it would have been
preposterous to make it stick. Ghana does not share a common
boundary with Nigeria. If Benin could not make the claim, there
was no way Ghana could.
Still, the thought that Nigeria had dipped a straw into a common
well and was sipping the oil away to her delight was enough to
disturb the imagination of some minds here.
As it stands now Ivory Coast is claiming that part of the deep
sea oil find in the west may belong to her. Accordingly, Ghana’s
Parliament is responding to the challenge, in preparation for a
battle of documents and law; and perhaps, later, for war.
Regardless of the outcome, the confrontation will cost Ghana a
lot of economic discomfort; a needless discomfort that Ghana
should have foreseen. But the same would cost the Ivory Coast
nothing.
Remember, announcements of oil find after another close to Ivory
Coast border could, perhaps, have kept her steaming in jealousy
all this time. This being Africa, where a neighbor’s fortune is
usually seen as your own misfortune, Ivory Coast may be wanting
to bring Ghana down a notch or two from her good fortune.
If the above is possible, then, please, don’t rule out the
Kosmos affair which sets up a rather confusing state to enable the
Ivory Coast to carry out her mischief.
Ghana has been in a tug of war with Kosmos against the sale of
the latter’s oil shares to Exxon-Mobil for $4 billion. So far,
the government has refused to allow the transaction to proceed,
transforming the deal into international tussle of high stakes
between Exxon-Mobil on one wing and the Chinese government on
the other.
This tussle between a company (Exxon-Mobil) and states
(Ghana/China) is about value. Since Kosmos is the seller, in all
likelihood, she will like to maintain a high value return for
her stake in the oil fields. You may strike her out in the
conspiracy theory that follows.
The Chinese and Exxon-Mobil, however, will love to have the
value of the oil fields driven down; the latter for spite and the former for
price. After all what purchaser would not love to have the value
of an oil stake in a potential conflict zone driven down? If you
doubt the obvious answer, ask Shell about her troubles in
Nigeria.
So the situation is set, with the Ivory Coast entry, to drive
the value down. And it will not be long before investors start
questioning the oil field’s financial viability with this sword
of Damocles hanging over everything.
Note that the Ivory Coast, in this conflict, has nothing to
lose. Truth be told, the fields are not her find. But if we
should go by the way mischief is priced in Africa, the mischief
maker always gains.
If Ivory Coast could knock down the market value of the Kosmos
stake from 4 to 3 billion, because of the budding trouble,
paying her something out of the difference would not be hard.
And note also, that the idea for the claim, like a coup, could
have come from one head with a pocket to stash the cash that may
follow the miscief.
Those who may doubt Ivory Coast’s capacity to cause havoc to
Ghana’s economy could always go back to the early 60’s to look
for the machinations against Nkrumah and Ghana.
The purchase price for cocoa in the Ivory Coast was dangerously
raised, with encouragement from the West, causing Ghanaian
farmers on the border to smuggle their cocoa to the Ivory Coast.
The result was a fall in producer volume for Ghana and an
increase in the same for the Ivory Coast.. The damage became
permanent when Ghana, the top cocoa producer then, became second
to the Ivory Coast.
This time, the Ivory Coast has less to do: just open her big
mouth and she could possibly cause a price drop and get to share
the difference in savings for the purchaser of the oil stake.
Even so, she
could still come back to promote more
border trouble, thereby causing bad publicity for Ghana’s oil
gains. Who,
after all, would want a financial stake in an oil conflict zone?
E.
Ablorh-Odjidja, Publisher
www.ghanadot.com, Washington, DC,
March 11, 2010
Permission to publish: Please feel free to publish or
reproduce, with credits, unedited. If posted at a website,
email a copy of the web page to
publisher@ghanadot.com . Or don't publish at all.
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