Oil “hot spot”: Ghana must proceed with caution
Masahudu Ankiilu Kunateh, Ghanadot

Accra, Feb 19, Ghanadot - The Government of Ghana has been urged to implement pragmatic measures and proceed with caution to ensure a transparent, accountable and efficient development of the oil and gas industry and the revenue it will generate for the social good of the citizenry.

A statement jointly issued by the Integrated Social Development Center and Oxfam America and Ghana indicate that whiles Ghana’s oil discovery has generated enormous interest in the country’s oil production potential ,a sad story is told of how the exploitation of natural resources in Africa has led to the increase in poverty and conflicts on the continent.

It said in too many countries oil booms have bred corruption, underdevelopment, social conflict and environmental damages.

“ Ghana ’s challenge as an “oil hot spot” will be to ensure that the right institutions and transparent policies are in place before production even begins”.

The group said it was important that the government of Ghana enacts a moratorium on signing new licenses, so they can organise an open bidding round and allow the country’s legal and institutional frame work to catch up to the pace of oil development whiles it strives to ensure a transparent revenue payment practices.

“Whiles these steps are not by themselves, a simple recipe for overcoming the threats posed by the oil boom, it is difficult to see Ghana succeed without them.” the group reiterated.

The group recounted that last year; Africa produced 12.5 percent of the world’s oil with great investment and exploration throughout the continent, but noted that this has yet to translate into tangible benefits for the continent’s poor.

It indicated further that as estimated Ghana will be producing approximately 120,000 barrels of oil per day, along with significant quantities of gas.

The Jubilee field has 600 million barrels of proven reserves and 1.2 billion barrels of probable reserves and the International Monetary Fund has also predicted that government’s revenue from oil and gas could reach a cumulative $20 billion over a production period of 2012-2030 in the jubilee field alone.

The group further contended that although mining law reforms and changes to investment rules in the last 20 years has led to a significant boom in mining investment in the country, gold mining has ironically led to small government revenues, increased conflict between companies and local communities, the removal of families from their lands, and increased environmental degradation.

The group thus urged that while some progress has been made in the Extractive Industry Transparency Initiative, government should be fully committed to extend this work to the petroleum sector.

Ghanadot