Date: April 1, 2009, 8:44 pm


ISODEC AND OXFAM AMERICA COMMEND GHANA'S STEPS TOWARDS OIL SECTOR TRANSPARENCY DATE


Ghana�s big test: Oil�s challenge to democratic development Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC Contents Executive summary 2 Introduction: Ghana and the �paradox of plenty� 5 Ghana�s coming oil boom 18 Key challenges and preparations for the boom 33 Conclusions and recommendations 53 Appendix 60 Endnotes 62 Cover image: A girl sits on an adult�s shoulders to get a better view as she waits in a crowd prior to the ceremony held for the inauguration of Ghana�s new President John Atta Mills in Accra, Ghana Wednesday, Jan. 7, 2009. The election of Mills, in the closest vote in Ghana�s history, makes the West African nation one of the few African countries to successfully transfer power twice from one legitimately elected leader to another. AP Photo / Olivier Asselin About the author Ian Gary is senior policy adviser for extractive industries with Oxfam America in Washington, DC. He is the co-author, with Terry Lynn Karl, Stanford University, of �Bottom of the Barrel: Africa�s Oil Boom and the Poor� and �Chad�s Oil: Miracle or Mirage?� Ian has been a frequent commentator on oil and development issues in major media outlets including the New York Times, Washington Post, and BBC, and he has testified before the US Congress and given presentations at the World Bank, UN, and other venues. He has been an adviser with the World Bank�s Extractive Industries Advisory Group and was an invited speaker at Ghana�s National Forum on Oil and Gas Development, February 2008. Notes and acknowledgments This report draws on fieldwork and research conducted in 2007 and 2008, including visits by the author to Ghana in December 2007, February 2008, and August 2008. Interviews were conducted with officials in Ghanaian ministries and agencies, oil companies, donors, civil society groups, and journalists. The author gratefully acknowledges the research assistance of Emily Greenspan, policy and advocacy adviser for extractive industries, Oxfam America. The author also acknowledges the collaboration of Steve Manteaw, media and campaigns coordinator for the Integrated Social Development Centre, and many others in Ghana and Washington who gave generously of their time. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC During the British colonial era, Ghana was known as the �Gold Coast� for its prolific gold deposits. Now, as in many countries before it, Ghana�s recent discovery of a major offshore oil field has created a mixture of exuberance and trepidation. For Ghana, one of the most peaceful and relatively prosperous countries in West Africa, the start of oil production in late 2010 would seem to come as good news. With the peaceful transition of power from the New Patriotic Party (NPP) government to the National Democratic Congress (NDC) government in 2009, Ghana hopes that its star will continue to shine and that oil revenues will help accelerate the country�s effort to meet the UN Millennium Development Goals by 2015. But, as so many other countries have shown, it is a difficult and tortuous journey to move from the generation of oil wealth to its proper investment. In too many other countries, oil booms have bred corruption, underdevelopment, social conflict, and environmental damage. The onset of oil production presents Ghana with its next great test. Ghana has an enviable record of good governance and stability. Despite this progress, Ghana is still a poor country of 23 million people dependent largely on primary commodity exports�cocoa, gold, timber. Almost 80 percent of Ghanaians live on less than $2 a day. The country has made some progress on economic diversification, but oil could add to the economy�s overreliance on commodity exports subject to price swings that make development planning difficult. Billions of dollars will flow into the government treasury, but Ghanaians are all too familiar with corruption, poor development outcomes in the country�s mining communities, and the tragedy of Nigeria�s squandered oil wealth. For the international oil industry, the 2007 �Jubilee� find�called one of the largest recent finds in Africa�has generated enormous interest in the country�s hydrocarbons potential. By 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day, along with Executive summary Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC significant quantities of gas. The International Monetary Fund has predicted that government revenues from oil and gas could reach a cumulative US$20 billion over the production period of 2012�30 for the Jubilee field alone. Oil wealth tends to erode democratic accountability. Ghana�s challenge will be to ensure that the right institutions and transparent policies are in place before oil production starts. The previous NPP government launched a �homegrown� effort to tackle the challenges of the oil era, establishing technical committees composed of government staff and expatriate Ghanaians to address issues from the fiscal regime to gas utilization. The state oil company, the Ghana National Petroleum Corporation, has made some disclosures to the public, but key details remain secret, including the oil contracts as well as the development plan for the Jubilee field. While the NPP government put forward transparency and good governance as key principles for the sector, it sent worrying signals as well� for example, a National Forum on Oil and Gas Development was by invitation only and included just three civil society members. While a draft policy paper and national regulatory authority bill were developed in 2008, many significant steps in building the institutional, legal, and regulatory system to govern the oil and gas sector rest with the new government. Since there will be a relatively short time frame for oil production� likely 20�30 years�it will be important to ensure that money is used wisely from the outset and that investments are sustainable once the money runs out. The needed institutions, regulations, and transparency measures should be in place early on to avoid the corrosive and corrupting effects of oil booms seen elsewhere in Africa. Because the Jubilee field is in development, the government does need to move at deliberative speed to be able to manage this large project. At the same time, Ghana needs to be careful to control the pace of the development of the petroleum sector so as to not let commercial developments outstrip the capacity of the government and society as a whole to meet the myriad challenges. In many ways, speed is not Ghana�s friend. Ghana should set its own timetable for the further development of the petroleum sector. By moving quickly, mistakes can be made that could decrease Ghana�s �take� from the sector and undermine accountable management of the resource. A few examples: Government will need to sequence tasks in developing the laws, regulations, and institutions for the sector. Rather than negotiating many deals at once, government can learn from experience and negotiate better deals over time. A common refrain is �he who drafts, wins,� and Ghana can develop improved negotiation skills over time. Allowing for civic participation takes time but will benefit the country in the long run through better policy decisions and greater ownership of these decisions. The attitude that �there is too much to do and talking to civil society takes time� is ultimately counterproductive. Regulations need to be in place before the impact. Social and environmental regulations and protections need to be in place before projects get � � � � Oil wealth tends to erode democratic accountability. Ghana�s challenge will be to ensure the right institutions and transparent policies are in place before oil production starts. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC under way rather than after, as was the case with many gold-mining projects. Because of stabilization clauses, contracts signed now will lock in the currently deficient regulatory regime. Ghana should not want to license all of its petroleum acreage before the regulatory framework is in place. Early spending could be bad spending. If Ghana�s budget and spending systems need improvement, massive early spending of oil money could prove to be wasteful spending. Ghana�s oil boom is happening in an era of increased attention to the problems of resource-rich states, and Ghana has important opportunities to learn from the positive and negative examples of others. This report makes extensive recommendations for the government, companies, donors, and others. (See full recommendations on page 53.) There are steps these actors should take to support the transparent, accountable, and efficient development of Ghana�s oil wealth. For example, the government of Ghana should ensure that payments from companies to the government, as well as contracts, are in the public domain. The government should also enact a moratorium on new exploration licenses to allow Ghana�s legal and regulatory framework, and institutional development process, to catch up. Companies should volunteer to disclose their payments and contracts and participate in Ghana�s Extractive Industries Transparency Initiative. In exchange for technical assistance project finance, donors should insist on full transparency and participation of citizens and civil society in the decisions regarding the development of the petroleum sector and oversight of natural resource wealth. While these steps�and many others in the full set of recommendations� are not, by themselves, a simple recipe for overcoming the threats posed by the coming oil boom, it is difficult to see Ghana succeeding without them. � The government of Ghana should ensure that payments from companies to the government, as well as contracts, are in the public domain. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC During the British colonial era, Ghana was known as the �Gold Coast� for its prolific gold deposits. Now, as in many countries before it, Ghana�s recent discovery of a major offshore oil field has created a mixture of exuberance and trepidation. Billions of dollars will flow into the government treasury, but Ghanaians are all too familiar with corruption and the tragedy of Nigeria�s squandered oil wealth. Ghana�s former president, John A. Kufuor, has said that the country�s new �black gold� will be the boost that Ghana needs to become an �African tiger.� During the euphoric days of June 2007 when the oil discovery was announced, President Kufuor said: �Oil is money, and we need money to do the schools, the roads, the hospitals. If you find oil, you manage it well, can you complain about that? Even without oil, we are doing so well, already. Now, with oil as a shot in the arm, we�re going to fly.�1 Meanwhile, Ghana�s citizens often voice concern that oil will lead to increased corruption and do little for poor people, pointing to the sorry state of mining communities in Ghana as well as oil-rich but dirt poor communities in neighboring Nigeria. For the international oil industry, the find�called one of the largest recent finds in Africa�has generated enormous interest in the country�s hydrocarbons potential, and Ghana has reportedly received more than 40 applications for oil exploration blocks since the announcement of the offshore Jubilee field. With more and more of the world�s oil locked up or controlled by state-owned companies, the potential of a new �frontier� zone has created enormous excitement for oil companies, some of whom are depleting their reserves faster than they can replace them with new finds. For Ghana, one of the most peaceful and relatively prosperous countries in West Africa, the start of oil production in late 2010 would seem to come as good news. Ghana hopes that its star will continue to shine and that oil revenues will help accelerate the country�s effort to meet the UN Millennium Development Goals (MDGs) by 2015. But, as so many other countries have Introduction: Ghana and the �paradox of plenty� Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC shown, it is a difficult and tortuous journey to move from the generation of oil wealth to its proper investment. In too many other countries, oil booms have bred corruption, underdevelopment, social conflict, and environmental damage. Therefore, the onset of oil production presents Ghana with one of its greatest tests. Ghana has an enviable record of good governance and stability. However, oil wealth tends to erode democratic accountability. Ghana�s challenge will be to ensure that the right institutions and transparent policies are in place before oil production starts. Report objectives This Oxfam America briefing paper has the following objectives: To raise the international profile of the Ghanaian oil boom and the threats and opportunities this boom poses to the country�s efforts at achieving the UN MDGs; To highlight for Ghanaians, especially civil society groups, journalists, parliamentarians, and concerned citizens, as well as those in the international community, key facts regarding the coming oil boom and key institutional, policy, and governance challenges, given the Ghanaian context and the experience of other developing country oil producers; To contribute to the policy debate in Ghana as to the appropriate steps for the new presidential administration to take; To influence the policies and practices of Ghana�s key international partners, including donors such as the World Bank, the International Monetary Fund (IMF), Britain, the US, Norway, Germany, and others; To make recommendations for the Ghanaian government, donors, oil companies, and others. The �Black Star of Africa� Ghana has traditionally been hailed as the �Black Star of Africa� for its early attainment of independence in 1957. After decades of misrule and mismanagement by weak civilian regimes and military governments, Ghana held democratic elections in 1992 and since that time has enjoyed 16 years of civilian rule, including a peaceful transition from the National Democratic Congress (NDC), the party of former military ruler Flt. Lt. Jerry J. Rawlings, to the New Patriotic Party (NPP) in 2000. Ghana�s fifth democratic elections in a row were held on Dec. 7, 2008, and after a run-off, the opposition NDC returned to power with a wafer-thin margin in the presidential contest and a majority of parliamentary seats. Managing Ghana�s transition to becoming a notable oil producer will be a key challenge for the new administration. Ghana is widely seen by donors and others as a �model country� in terms of macroeconomic and political stability, investor friendliness, good governance, and efforts to reduce poverty, and it has received billions in donor � � � � � Ghana is widely seen by donors and others as a �model country� in terms of macroeconomic and political stability, investor friendliness, good governance and efforts to reduce poverty, and has received billions in donor assistance and debt relief over the past two decades. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC assistance and debt relief over the past two decades. The World Bank calls Ghana �one of the best performing economies in Africa� and the US signed a Millennium Challenge Account Compact with Ghana in 2007 worth $547 million.2 Ghana successfully completed an IMF Poverty Reduction and Growth Facility in October 2006. Ghana has received generally high marks from international monitors for the quality of its elections. Ghana also has a vibrant civil society sector and a thriving independent media sector. (Independent radio stations have popular call-in programs debating key public policy issues.) In the 2008 budget statement, the minister of finance pointed to a number of achievements:3 The gross domestic product (GDP) growth rate of 3.7 percent in 2000 increased to 6.3 percent in 2007 (and the IMF expected this to remain strong at 6.5 percent during 2008). Inflation was brought down from 40.5 percent in 2000 to 10 percent in 2007 (although it rose to 16 percent in 2008).4 The Ghanaian currency, the cedi, has stabilized against major currencies. External debt was cut from $6.3 billion in 2000 to $2.6 billion in 2007. Ghana became the second Sub-Saharan African country to raise money on the international bond market with a $750 million Eurobond sale in September 2007.5 Ghana has become one of the third world countries to achieve the MDG of cutting extreme poverty by half ahead of the scheduled date of 2015. The World Bank says that �overall poverty has declined from 52 percent in 1992 to 28 percent in 2006, and Ghana is on course to exceed the 2015 MDG of halving her poverty,� while in Sub-Saharan Africa overall, there has been no comparable decline in the poverty rate.6 Regarding governance, Ghana scores above the 50th percentile in the World Bank Institute�s Worldwide Governance Indicator rankings and has been making steady progress in these rankings over the past decade. (The rankings cover issues such as the rule of law, government effectiveness, regulatory quality, and �voice and accountability.�7) Ghana does far better on all six indicators than its resource-rich neighbors in Africa, such as Nigeria, Angola, Cameroon, and Chad. Only Botswana and South Africa slightly outrank Ghana among resource-rich countries. On corruption, Ghana ranks 67 out of 180 countries ranked in Transparency International�s Global Corruption Report 2008. Only Botswana, South Africa, and Namibia outrank Ghana in this table. The bottom of the table is populated by many oil- and mineral-rich countries such as Chad, Angola, Equatorial Guinea, and Congo-Brazzaville. Despite this progress, Ghana is still a poor country of 23 million people dependent largely on primary commodity exports�cocoa, gold, timber. The country�s Gross National Income per capita is $590, with about 78.5 percent of the Ghanaians living on less than $2 a day. Life expectancy is 59.1 years, and the infant mortality rate is 112 deaths per 1,000 live births.8 Regional income disparities abound, with those in rural areas and the northern � � � � � � Despite some notable progress, Ghana is still a poor country of 23 million people dependent largely on primary commodity exports� cocoa, gold, timber. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC part of the country not experiencing as much reduction in poverty. According to the UN Development Program�s �Ghana Human Development Report 2007,� 45 percent of those living in the rural savannah area of northern Ghana lived in extreme poverty in 2006, compared with 5.4 percent in Accra, the capital, and a national rate of 18 percent.9 The same report says the income inequality worsened between 1998 and 2006. Opposition candidates have jumped on these figures and claimed that Ghana�s stability and economic growth have left many behind. �This has been a period of increasing corruption and a broadening gap between rich and poor. For most people, progress has been an illusion,� says James V. Gbeho, a senior official with the NDC party and a foreign minister during the 1990s.10 Ghana has made some progress in trying to diversify its economy, building on an English-speaking population and investment in information technology infrastructure to attract data processing and service industries, and the country is rapidly increasing its tourism receipts. Ghana has also benefited from being an island of stability in West Africa, attracting the regional offices of multinational companies. At the same time, the IMF has warned that in the last year fiscal spending has increased. �The economy is experiencing demand pressures that are causing macroeconomic imbalances and increasing risks to external stability; high twin fiscal and external account deficits have emerged and inflation has risen.�11 With presidential elections in December 2008, government spending discipline relaxed, with a growing wage bill and subsidies. An energy crisis has hampered industrial growth, and Ghana is vulnerable to external shocks because of its total dependence on imported oil and because of price swings for export commodities. Can extractive industries help Ghana �to fly�? Ghana is no stranger to extractive industries or development strategies built on primary commodity exports. Ghana is the second-largest gold producer in Africa�during the era of British colonialism it was called the �Gold Coast�� and the country also produces bauxite, manganese, and diamonds. A large part of the rural population depends on cocoa production and exports to earn a living. Timber is also an important export. With the arrival of oil, some are concerned that this could hamper and not aid development strategies that are working to move away from a primary commodity approach. Ghana has been an important gold producer for decades, and mineral-led development and policy changes designed to encourage investment in the sector have been heavily promoted by the World Bank. With mining law reforms�including revisions to the Mining and Minerals Law in 2006� and changes to investment rules in the past 20 years, Ghana has recently experienced a boom in mining investment. In 2007, Ghana produced almost 2.5 million ounces of gold.12 This increase in investment and production has yielded relatively little in government revenues and local development, engendered increased conflict between companies and local communities, caused the removal of families from their lands, and increased environmental degradation. A study by the World Bank�s Operations Evaluation Department in 2003 found that Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC it was �unclear what [gold mining�s] true net benefits are to Ghana.� This was after the World Bank had heavily promoted mineral-led development for Ghana and prior to the World Bank�s large investment in the Newmont Ahafo Gold Mine in 2005.13 The report went on to add: Large-scale mining by foreign companies has a high import content and produces only modest amounts of net foreign exchange for Ghana after accounting for all its outflows. Similarly, its corporate tax payments are low, due to various fiscal incentives necessary to attract and retain foreign investors. Employment creation is also modest, given the highly capital intensive nature of modern surface mining techniques. Local communities affected by large-scale mining have seen little benefit to date in the form of improved infrastructure or service provision, because much of the rents from mining are used to finance recurrent, not capital, expenditure. A broader cost-benefit analysis of large-scale mining that factors in social and environmental costs and includes consultations with the affected communities needs to be undertaken before granting future production licenses.14 According to the Ghana Chamber of Mines, a reported $53.8 million was paid in royalties to the Ghanaian government by all mining companies in 2007.15 A report under the Ghana Extractive Industries Transparency Initiative (EITI)�reconciling reported government receipts and reported company payments, including royalties, dividends, corporate taxes, etc.�showed a total of 40,635,725 Ghanaian cedis, or approximately $34.8 million in 2005. A 2008 World Bank report says that Ghana lacked the capacity to properly collect revenues and audit payments from gold-mining companies during the past three years as gold prices more than doubled. The result has been that �increases in metal prices mainly translate into benefits for operators. Improving mining sector revenue management is key to translate mining investment in Ghana into sustainable development outcomes.�16 It is unclear whether the relatively small amounts of mining revenue offset the social and environmental costs to communities and the country. Communities have complained of pollution and cyanide spills that spoil the environment and contaminate water sources.17 One recent report estimated that environmental costs from gold mining had reached 6 percent of GDP.18 Meanwhile, conflicts between community members and mining companies have increased. Ghana�s human rights ombudsman, the Commission on Human Rights and Administrative Justice, issued a report in September 2008 following over a year of investigative fieldwork. The report concluded that: ... [there] is evidence of widespread violations of human rights of individual members of communities and communities� collective rights in some mining areas in the country. � The Commission found evidence to conclude that there has been widespread pollution of communities� water sources, deprivation and loss of livelihoods. Several examples of excesses by the security agencies and the security contractors of the mining companies were provided and documented. Some of these excesses had resulted in serious injuries and were sometimes fatal. It appears most people living in mining communities in Ghana believe that the right to development remains an empty promise to them even though the UN General Assembly officially recognized this right in a Declaration over two decades ago.19 Gold mining investment and increased production has yielded relatively little in government revenues and local development, engendered increased conflict between companies and local communities, caused the removal of families from their lands and increased environmental degradation. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 10 A visitor to villages and towns near large mines in Ghana�s Ashanti, Brong Ahafo, and Western Regions would see evidence of neglect and underdevelopment, rather than the development one would expect to see in communities close to such natural resource wealth. With the discovery of oil, coastal communities, mindful of the experience of mining communities in Ghana and villages in the Niger Delta in Nigeria, are now concerned that they will suffer the same fate and that government revenues will fail to �trickle down� to improve their lives. The tragedy and elusive promise of extractive industry wealth Unfortunately, around the world the exploitation of natural resources has far too often led to increased poverty and conflict. Economists and political scientists have grouped the problems faced by resource-rich countries under such phrases as the �paradox of plenty� or the �resource curse.� The IMF recently classified 53 countries, including Ghana, as hydrocarbonor mineral-rich.20 Many of these countries suffer from various symptoms of the resource curse or paradox of plenty and have suffered from low growth: between 1970 and 1993, countries that were resource poor (without petroleum) grew four times more rapidly than resource-rich countries.21 There is a growing body of literature examining the resource curse.22 In the 2001 Oxfam America report titled, �Extractive Sectors and the Poor,� Michael Ross, a political science professor at the University of California, Los Angeles, presented many key findings.23 These include the following: Overall living standards in oil- and mineral-dependent states are exceptionally low�lower than they should be given their per capita incomes. Both oil- and mineral-dependent states are exceptionally vulnerable to economic shocks. Oil- and mineral-dependent states tend to suffer from unusually high rates of corruption, authoritarian government, military spending, and civil war. Countries rich in oil, gas, and minerals exhibit exceptionally high rates of child mortality and government ineffectiveness relative to other countries at a similar income level. Oil dependence is also associated with high rates of child malnutrition, low spending levels on health care, low enrollment rates in primary and secondary schools, and low rates of adult literacy. Mineral dependence is strongly correlated with income inequality. Many countries dependent on extractive industries often share a variety of characteristics and challenges, some of which Ghana has faced or may face with the coming oil boom.24 Oil booms raise expectations and increase appetites for public spending. � � � � � � � With the discovery of oil, coastal communities, mindful of the experience of mining communities in Ghana and villages in the Niger Delta in Nigeria, are now concerned that they will suffer the same fate and that government revenues will fail to �trickle down� to improve their lives. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 11 With booms often comes dramatically increased, and unsustainable, public spending based on unrealistic revenue projections. Increased public spending often feeds a patronage system rather than being effective in reducing poverty and increasing public goods. In Gabon during the 1990s, a World Bank report noted that there �is a striking imbalance between the mediocre outcomes in health and education and the relatively high level of public spending for these sectors. The health sector presents a demographic and epidemiological profile typical of a poor country. Public health indicators are only average for Sub-Saharan Africa.�25 Even in countries with a degree of political will to allocate a windfall wisely, weak government capacity hampers effective spending. Countries dependent on extractive industries are exposed to external price shocks. The volatility of oil prices�ranging from $140 per barrel to below $40 in 2008 alone�hinders growth and makes planning for poverty alleviation and national development difficult. Government budgets often rise and fall in relation to the oil price in countries such as Nigeria. Ghana has experienced booms and busts based on gold and cocoa exports. These boom and bust cycles are bad for development. A sudden influx of wealth from an oil or mineral boom often means a loss of fiscal control and difficulty with planning and sticking to government budgets. Midyear surpluses lead to the need for supplemental budgets. In some countries, these surpluses are never accounted for. In the worst cases, much oil money never makes it into the official budget, engendering a system of parallel budgets or off-budget spending. Foreign debt grows faster, and countries often go on borrowing sprees based on their new �credit worthiness.� Some countries, such as Angola, have taken out �oil-backed loans� whereby the country pledges future oil production for up-front cash. Thus, Angola and other countries have �mortgaged their future� using oil as collateral. With �easy� money rolling in, many countries reduce their efforts at non-oil revenue collection. When this happens, petrodollars replace more stable and sustainable tax revenue streams. This frees oil-exporting governments from the types of citizen demands for fiscal transparency and accountability that arise when people pay taxes directly to the government. Thus petrodollars actually sever the very link between people and their government. Through the �Dutch Disease� effect, oil and mineral booms can have the effect of crowding out other productive sectors of the economy. These effects can hamper efforts at diversifying the economy. According to the 2003 Catholic Relief Services report �Bottom of the Barrel: Africa�s Oil Boom and the Poor�: The Dutch Disease occurs when oil windfalls push up the real exchange rate of a country�s currency, rendering most other exports noncompetitive. At the same time, persistent Dutch Disease provokes a rapid, even distorted growth of services, transportation, and construction, while simultaneously discouraging some industrialization and agriculture. Agricultural exports�a labor-intensive activity particularly important to the poor�in particular are adversely affected by economic dynamics set off by the exploitation of petroleum. The languishing � � � � � � � Increased public spending often feeds a patronage system rather than being effective in reducing poverty and increasing public goods. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 12 of the agriculture and manufacturing sectors of oil countries not only makes them more dependent on petroleum, thereby exacerbating other problems of dependency, but it can also lead to a permanent loss of competitiveness. Meanwhile, the oil sector cannot make up the shortfall.26 Extractive industry investment creates enclave economies where the investments have few linkages to the rest of the economy and few jobs are created. With offshore oil production, the investment is both a physical and economic enclave. In Chad, the $4.7 billion oil investment created some short-term employment during the construction phase but few permanent jobs for Chadians. In early 2008, only 184 supervisory positions� or 6 percent of jobs �were held by Chadians.27 In many countries, local businesses are passed over for contracts or do not have the capacity to provide the goods and services required by international oil firms. Many countries dependent on extractive industries suffer from a lack of transparency regarding the activities of the sector and the financial flows generated. Contracts for oil concessions are often shielded by confidentiality clauses, even though the government is licensing access to natural resources on behalf of its population. Payments made by companies to governments�royalties, taxes, etc. �are often kept secret or are difficult to discover. Finally, in some countries, it is difficult to access government budget information or to track how money is being spent. On top of these problems, extractive industries, involving payments directly to central governments, tend to concentrate power and resources. Many resource-rich countries have an absence of counterpressures�such as an active and capable civil society, independent media, and an impartial judiciary�leading to a deficit of democratic accountability and poor human rights records. In countries where such institutions exist at the beginning of a resource boom, these are often eroded as governments seek to obtain more power and control over the boom. Economist Paul Collier has argued that �checks and balances significantly and distinctively raise growth in the context of large natural resource rents.�28 Finally, many resource-rich countries suffer from local or regional grievances and, at times, rebellions. Too often, those communities closest to the resource extraction sites are those that suffer the most environmental and social impacts and receive the least in terms of benefits through government spending. The plight of the Niger Delta in Nigeria is a classic case of this dynamic, with the rebel group MEND (Movement for the Emancipation of the Niger Delta) feeding off of local grievances and causing hundreds of thousands of barrels a day to go �offline� because of attacks and unsafe operating environments. As �Bottom of the Barrel: Africa�s Oil Boom and the Poor� states: �Where business lacks transparency, governments are accountable to none, economies are weak, administrative capacity lacking, and participation absent or wanting�yet investments and lending continue to pour in without restrictions�rent-seeking and corruption result. Over time, earnings are squandered, a precious asset is depleted, and widespread poverty remains.� � � � � Many countries dependent on extractive industries suffer from a lack of transparency regarding the activities of the sector and the financial flows generated. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 13 Ghana�s discovery in the context of Africa�s oil boom Over the past 20 years, Sub-Saharan Africa has been experiencing a large ramp-up in investment and production of oil and gas. This surge in production has had profound impacts for the people and political economy of nations in Africa�s Gulf of Guinea region and elsewhere.29 With oil fields in other parts of the world �locked up� in the hands of governments and national oil companies, international oil and gas firms have flocked to Africa based on open investment policies, lucrative offshore finds, and easy shipping to international markets. Africa produced 12.5 percent of the world�s oil last year and has been the site of intense exploration and investment in the past decade.30 Ghana�s Jubilee field is but the latest find, while other discoveries have recently been made in Uganda and elsewhere. Much of Sub-Saharan Africa�s high growth rates have been driven by foreign direct investment (FDI) in the extractive industry sector. According the Economic Commission for Africa, FDI reached a high of $35 billion in 2006, driven by oil, gas, and mining investments.31 African oil is largely exported to Europe (33 percent) and the US (32 percent), while China imports 9 percent.32 The US has seen its share of oil imports from Sub-Saharan Africa increase, with 18 percent coming from the region in 2007�more than from the Persian Gulf.33 A boom in production and world oil prices has meant a huge windfall for Africa�s oil-producing states. During the 2002�2006 period, oil-producing TABLE 1. Oil producers in Sub-Saharan Africa Sources: Oil and Gas Journal, Economist Intelligence Unit, Tullow Oil P.L.C. Estimated reserves (1,000 barrels) Production (1,000 barrels per day [bpd]) Angola 8,000,000 1,695 Cameroon 400,000 84 Chad 1,500,000 150 Congo-Brazzaville 1,600,000 240 Equatorial Guinea 1,100,000 320 Gabon 2,000,000 230 Ghana, current 15,000 6 Ghana, potential 600,000� 1,300,000 40� 150 Ivory Coast 100,000 30 Mauritania 100,000 26 Nigeria 36,220,000 2,167 Sudan 5,000,000 472 Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 14 countries in Sub-Saharan Africa tripled their aggregate oil GDP from $30 billion to $105 billion. During the same period, oil revenues went from $18 billion to $71 billion.34 In 2002, PFC Energy, a consulting firm, projected that African governments would receive at least $349 billion in government revenues through 2019. During the present boom period, African oil producers have increasingly become dependent on oil for government revenue�well over one-half of total 2006 revenues came from oil in Angola, Chad, the Republic of Congo, Equatorial Guinea, Gabon, and Nigeria.35 In Angola, more than 90 percent of government revenue comes from oil. But the current oil boom in Africa has yet to translate into tangible benefits for poor people. Previous booms in places such as Nigeria have produced a large uptick in spending that has been unsustainable and not targeted at poverty reduction. Overall, resource-rich countries in Africa have experienced lower growth rates than resource-scarce countries. According to the African Development Bank�s �African Development Report 2007�: � Resource-rich countries only experienced an average growth rate of 2.4 percent from 1981�2006, considerably lower than the average of 3.8 percent for resourcescarce countries. Indeed, resource-scarce African countries out-performed resourcerich countries in terms of real per capita GDP growth during the 1981 to 2001 period, with a reversal occurring thereafter, reflecting the current boom. � On the contrary, resource-scarce countries were able to achieve real growth during nearly the whole 1980�2005 period, albeit at a modest rate, and have thus significantly narrowed the gap with resource-rich countries.36 For some countries, such as Gabon, the oil era is coming to a fast end, with little to show for it. Production on the continent may peak as soon as 2013 or 2014, according to oil industry consultants, topping out at 7.1 million barrels per day (bpd) compared with 5.8 million bpd in 2008.37 Global efforts to address the resource curse are growing The problems of resource-rich countries have captured the attention of international donors, governments, academics, and global civil society over the past decade. The story of vast wealth alongside large-scale poverty has been covered by journalists from Angola to Azerbaijan. Recognition of the global reality of the resource curse, coupled with a global expansion of extractive industry exploration, high commodity prices, and increasing demand from emerging economies in Asia, has made �combating the resource curse� rise to the top of the international development agenda. Most efforts to date have focused on removing the veil of secrecy that shrouds the financial flows in the extractive industries. By increasing transparency and public information, civil society groups, journalists, and parliaments can play a more active role in �following the money� and building systems of democratic decision-making on how resource wealth should be managed and spent. In 2002, the global Publish What You Pay (PWYP) civil society coalition was launched and now counts more than 300 environmental, human rights, development, religious, and other groups among its membership.38 The coalition includes many national platforms, including By increasing transparency and public information, civil society groups, journalists, and parliaments can play a more active role in �following the money� and building systems of democratic decision making. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 15 in Ghana, and advocates for transparency of extractive industry contracts, payments, and government expenditures. Shortly after the launch of PWYP, the British government launched the EITI.39 The EITI is a voluntary initiative designed to increase transparency of payments by companies to governments. The EITI requires governments to demonstrate political will and sign on to the initiative. Using a multistakeholder approach at the country level and the global governance level, the EITI includes governments, companies, and civil society groups. At the country level, companies disclose payments to an aggregator and governments disclose receipts. Discrepancies are reconciled and a report published. Years of negotiation led to the establishment of participation criteria and principles as well as rules for �validating� EITI implementation. In the two years since the EITI summit in Norway that established the validation criteria, many institutions and actors have endorsed the initiative, but no country has successfully completed the validation process and achieved �compliant� status. After three global EITI conferences since 2003, reports on payments of varying quality have been produced in a number of EITI countries, and 24 countries are now officially �candidates,� although progress is slowed or stalled in many places. In Africa, Ghana and Nigeria have published reports under the initiative, but neither country has been validated, and civil society groups in Ghana are concerned that the process could become an empty exercise if report recommendations are not implemented by the government. A major weakness of the EITI approach is its voluntary nature. Countries that need transparency the most are often the least likely to sign on to the process or faithfully implement it. Companies that participate in the initiative are only obliged to report payments in countries of operation that subscribe to the EITI. The EITI also does not cover the disclosure of extractive industry contracts�in other words, a country could be fully �compliant� while keeping all of its contracts secret. In Nigeria, voluntary commitments to the EITI have been enshrined in a new transparency law, but in many others progress depends on political will, which may wax and wane over time. Finally, some countries may make progress on disclosure of information but not improve other aspects needed to address the resource curse, such as respect for human rights and independent media. For example, Congo-Brazzaville prevented a civil society activist from attending EITI global board meetings, and Gabon banned PWYP local activists from operating during 2008 and arrested a civil society activist and local EITI participant and journalists investigating corruption, while maintaining its board position.40 International donors, such as the World Bank and the IMF, have also become increasingly active in the sector. The World Bank, long a controversial financier of extractive industry projects such as the Chad-Cameroon pipeline, has been a key provider of technical assistance and support for the implementation of the EITI in many countries. It has also adopted a mandatory requirement for payment disclosure by any oil, gas, or mining company receiving financing from the bank�s private sector arm, the International Finance Corporation (IFC). Finally, the World Bank has announced an approach that would involve assistance to countries to improve transparency and best practices across all steps of the value Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 16 chain�from licensing for exploration to the collection, management, and expenditure of revenues. (To the consternation of the EITI secretariat and adding to public confusion, the World Bank dubbed this approach �EITI++.�) It remains unclear what this new approach for the World Bank will look like in practice, and the institution continues to promote direct financing of extractive industry projects, even in countries that would appear unable to manage the risks and boom in revenues. The IMF has ramped up its technical assistance and, in some cases, made revenue or contract transparency a trigger in the implementation of its policy and lending programs. In addition, the IMF�s �Guide on Resource Revenue Transparency� laid out good practice steps in managing resource revenues at all stages of the value chain�from licensing for exploration to the collection, management, and expenditure of revenues�but it has not made the practices laid out in the guide a consistent condition for countries across the board. In part because of the weaknesses in existing efforts, such as the EITI, leading members of the US Congress have been exploring new legislation that would make payment disclosure mandatory. The extractive industries transparency disclosure bill was introduced in the House of Representatives and Senate in 2008 and was the subject of a legislative hearing in the House Financial Services Committee in June 2008. A former vice president from Shell, a leading member of the investment community, a securities lawyer, and the director of the Revenue Watch Institute all spoke out in favor of the bill.41 Congressional proponents of the bill plan to reintroduce the legislation in 2009, and, if passed, the bill would require any company registered with the US Securities and Exchange Commission to disclose their payments on a country-by-country basis annually. The legislation would capture not only US companies but European, Canadian, Chinese, and other companies.42 The introduction of the legislation in the US represents a recognition that solving the resource curse is a priority not only for resource-rich countries, but also for consuming countries such as the US. During a US Senate hearing in September 2008 on �Resource Curse or Blessing? Africa�s Management of Its Extractive Industries,� Senator Russ Feingold said: The impact of this curse is not limited to the resource-rich countries themselves. The United States and other developed countries are also affected. ... It exacerbates global poverty, which can be a seedbed for terrorism, it dulls the effect of our foreign assistance, it empowers autocrats and dictators, and it can crimp world petroleum supplies by breeding instability. ... The Extractive Industries Transparency Initiative is one of several international efforts to fight the resource curse, and the report urges the administration to give the EITI more vigorous support. It also urges the oil, gas, and mining companies, which often express support for transparency, to do more to encourage it in the countries where they operate.43 While some limited progress has been made to increase transparency in resource-rich states, secrecy around revenues is but one facet of the resource curse and much more work remains to be done. Addressing conflicts between communities and companies around extraction sites remains key, as well as ensuring that transparency practice does not outstrip human rights practice. Finally, consuming countries must send the diplomatic signals that prioritize accountable management of resource wealth over commercial access to these commodities. A Senate Foreign Relations Committee report While some limited progress has been made to increase transparency in resource-rich states, secrecy around revenues is but one facet of the resource curse and much more work remains to be done. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 17 on the problems of oil-producing countries released in 2008 called US efforts sporadic and lacking coherence and recommended that all G8 countries adopt mandatory payment disclosure rules for companies.44 The story of Chad�s recent experience with oil highlights the enduring challenges of turning oil revenues into sustainable poverty reduction. Little more than five years ago, the eyes of the oil world and of international donors were on the Central African nation. Although desperately poor and emerging out of civil war, Chad, we were told, would be the first country in Africa to defy the �oil curse� with the help of the World Bank and other donors. In 2002, the Central Africa representative at the time for the IFC said, �This is going to be the model for every single project of this type worldwide.� 45 Chad�s President Idriss Deby, meanwhile, promised the country, �The development of the crude oil will benefit the entire Chadian nation.�46 Today, the hopes that Chad would manage its new oil wealth have been shattered.47 The innovative Petroleum Revenue Management Law� designed to ensure transparency and funnel money to health, education, and other social needs�was significantly modified in 2006, allowing the government to spend more money on arms and other needs. After a standoff with the World Bank over these modifications, the government agreed to spend 70 percent of its revenues on poverty reduction. Despite the promises, little money has trickled down to villagers near the oil field in southern Chad, and in February 2008 fighting between rebels and the government decimated the capital, forcing tens of thousands to flee, including many civil society activists who had sought to hold the government accountable in the spending of oil wealth. Using a state of emergency, the government of Chad temporarily suspended even its weakened oil revenue law.48 Finally, the World Bank itself withdrew from the �model� project in September 2008. Ghana is not Chad, and Ghana has a recent record of building a system of democratic governance. But the story in Chad, and in so many other countries, shows the significant hurdles that have to be overcome in order to use oil for poverty reduction and to put the country on a path to sustainable and equitable growth. While some argue that Ghana is at the threshold of becoming a middle-income country, a mismanaged oil boom could easily tip it in the opposite direction. While some argue that Ghana is at the threshold of becoming a middle income country, a mismanaged oil boom could easily tip it in the opposite direction. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 18 �Oil fever� has gripped Ghana since the first major oil discovery in the country�s history was announced in June 2007. Since that time, Ghana has rapidly emerged as an oil industry hotspot. While there has been some oil exploration over the past century, with a trickle of oil produced in the Saltpond field, it has only been in the past decade that serious efforts have been made. A successful drilling campaign by relatively small oil companies willing to take a risk has resulted in Ghana�s first large-scale, commercially viable oil field. The Jubilee field, named for the fact that it was discovered in the same year the country celebrated 50 years of independence, may reach a production level of 120,000 barrels of oil each day by 2011. (Ghana�s current consumption of oil is 40,000�60,000 bpd, almost all imported.) Former President Kufuor stoked Ghana�s oil fever by proclaiming at the end of 2007 and again in early 2008 that Ghana had oil reserves of 3 billion barrels, a figure greeted with skepticism by oil industry experts.49 Now, with further exploration and data, the oil industry publication Upstream said in December 2008 that the 3 billion figure �raises few eyebrows today as companies pile in to drill up their share of the oil bonanza.�50 Depending on oil prices and future production levels, Ghana could soon see more than $1 billion added to government revenues each year, according to conservative estimates by the German technical cooperation organization GTZ. Even much lower estimates will easily eclipse current revenues from mining (largely gold) exports. Ghana�s life as an oil producer may be relatively short�20�30 years� and the country must move rapidly to beef up its legal and administrative framework to meet the significant managerial, administrative, political, and financial challenges the oil rush presents. Ghana�s birth as an oil producer coincides with a political transition�with a new presidential administration, cabinet ministers, and Parliament installed in January 2009. Ghana�s coming oil boom Oil can often prove the undoing of many nations. Ghana is at the threshold of great things in the oil industry. Let us approach the find with sobriety. Government will continue to consult widely over the coming months as it prepares an organic and comprehensive master plan. �Ghana�s former president, John Kufuor, National Forum on Oil and Gas Development, Feb. 25, 2008 � � Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 19 The Jubilee discovery and beyond Ghana�s oil rush is anchored by the significant Jubilee field, which straddles two oil blocks (see map) in the deep Atlantic waters offshore from western Ghana, approximately 63 kilometers (39 miles) from the coast and 132 kilometers (83 miles) southwest of Takoradi. The West Cape Three Points block is led by an American company, Kosmos Energy, which signed a contract for the block in 2004. The neighboring Deepwater Tano block, led by the Anglo/Irish company Tullow Oil, covers the other portion of the Jubilee field discovery. Exploratory drilling by Kosmos and then Tullow in 2007 (the Mahogany and Hyedua wells) and further appraisal wells have confirmed the significant size of the discovery, estimated by Tullow at between 600 million and 1.8 billion barrels of oil��a world-class sweet oil field.�51 (Oil from Jubilee is light, sweet oil that is projected to sell at parity with the Brent oil market benchmark price.52) Results announced in December 2008 by Tullow suggest that proven reserves�now at 600 million barrels�could eventually reach more than 1.2 billion barrels.53 The field is also rich in gas, with an estimated 800 billion cubic feet of gas in the field as a whole.54 �[This discovery is] hugely significant for Tullow and hugely significant for Ghana.� � Paul McDade, Tullow Oil, Capital Markets Day presentation, Oct. 1, 2008 FIGURE 1. Detail of Jubilee field off the coast of western Ghana. Source: Tullow Oil Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 20 In December 2008, Tullow announced positive results of the Hyedua 2 well in the Deepwater Tano block, which may upgrade the geographical size and reserve estimate for the field. Published reports indicate a possible field size of 1 billion barrels. (This is roughly equivalent to the Doba oil project in southern Chad�a project developed by ExxonMobil and partners at an investment of $4.7 billion, including an export pipeline.) For both Kosmos and Tullow, the Jubilee field is huge for the life of the company. For Tullow, a FTSE (Financial Times Stock Exchange) 100 publicly traded company based in London, the Jubilee field, coupled with a find in Uganda, has made the company a medium-sized company to watch. After positive results from the Hyedua 2 and Mahogany 3 wells, the company�s shares led sharp rises in the FTSE 100. Kosmos is a small, Texas-based private company composed of many former Triton Energy employees. Triton Energy discovered the Ceiba field in Equatorial Guinea in 1999. James Musselman took over Triton in 1999 and subsequently moved to Kosmos when Triton was bought out by Hess. In 2002, Musselman called Equatorial Guinea (a poster child for the toxic combination of oil wealth, corruption, and human rights abuses) �stable� and a place where the �president is sincerely trying to improve things.� For Kosmos, this is the project that will propel the growth of the company.55 A Kosmos official has called the discovery the largest discovery in West Africa in the past 10 years. FIGURE 2. Ghana: Hydrocarbons exploration Source: African Energy Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 21 Kosmos and Tullow are joined by other companies in the ownership structures for the blocks (see Table 2, �Offshore Oil Blocks in Ghana�). The US company Anadarko Petroleum Corporation, a large and experienced player in the industry, has a stake in both blocks that cover the Jubilee field. The E.O. Group is a Ghanaian company with a 3.5 percent ownership stake in the West Cape Three Points block. Directors of the E.O. Group include Kwame Bawuah-Edusei, Ghana�s current ambassador to the US, and George Yaw Owusu, also the country manager for Kosmos.56 Both men were honored by then-President Kufuor with the Order of the Volta medal in 2008 for their involvement in the Jubilee find. Because the Jubilee field straddles two blocks governed by two petroleum agreements, the oil companies involved and the Ghana National Petroleum Corporation (GNPC) have had to develop a �unitization agreement� to develop a joint contractual framework and geographically delimit the Jubilee field area. Beyond the Jubilee field, there is active exploration and licensing interest in Ghana�s offshore areas, much of this spurred by the 2007 discovery. Both Kosmos and Tullow, along with their partners, are doing further exploration outside of the unitization area. Kosmos has high hopes for a find outside the Jubilee field�in fact, the Jubilee discovery came as a surprise, as it was not the primary target in the West Cape Three Points block. Kosmos CEO Musselman told African Energy during an October 2008 visit to Ghana, �We have been able to identify a couple of areas with the same attributes as Jubilee, and we have a high degree of confidence of making another find as big as Jubilee.� In October 2008, Kosmos said the company would sink five wells in the coming 200 days in the Jubilee field, spending up to $100 million in the process.57 Tullow drilled a successful exploration well�Ebony 1�in the Shallow Water Tano license area. Anadarko�s CEO has said, �The partnership expects to be active in the area in 2009 and anticipates drilling development, appraisal, and at least three additional high-impact exploration wells, including Tweneboa, Teak, and Onyina.�58 The drilling of Tweneboa was planned to begin in late January 2009. Other exploration wells have been drilled or are being planned for the Keta block and the South Deepwater Tano block. Developing the Jubilee field Developing an offshore field such as Jubilee will take years, the involvement of several companies and many contractors, and several billions of dollars in financing. Scarce and expensive drilling rigs will be moved into place� costing $600,000 to $1 million or more per day�and a floating production, storage, and offloading (FPSO) vessel will be manufactured and put into place to gather, store, and load oil onto tankers for the export market. The four main companies involved in the field�Kosmos, Tullow, Anadarko, and the GNPC�negotiated a unitization agreement during mid- to late 2008 and worked together to present a field development plan to the Ghanaian government for approval. Originally scheduled for presentation in September 2008 for sanctioning by the government, the field development plan was, by the end of 2008, not yet sanctioned by the minister for Beyond the Jubilee field, there is active exploration and licensing interest in Ghana�s offshore areas, much of this spurred by the 2007 discovery. Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 22 energy. Potential conflicts of interest exist in that the government, through GNPC, is in the position of both participating in the development of and evaluating the field development plan. A formal review by the Ministry of Energy was begun in December�with outside assistance from experts from Norway and Britain�but the Ministry of Energy will rely on GNPC, where the government�s petroleum expertise is concentrated. Barring any objection, the consortium may assume approval. According to the 2004 petroleum agreement with Kosmos for the West Cape Three Points block, 30 days after submission of a development plan by the companies to the minister of energy, the �development plan shall be deemed approved as submitted, unless the minister has before the end of the period� given notice to the companies that the plan has not been approved or that revisions are proposed.59 TABLE 2. Offshore oil blocks in Ghana West Cape Sources: African Energy, Upstream, GNPC Three Points Kosmos, 30.875 percent (operator); Anadarko, 30.875 percent; Tullow, 22.896 percent; GNPC, 10 percent (carried); E.O. Group, 3.5 percent; Sabre Oil and Gas Ltd., 1.854 percent � � � � � � Deep Water Tano Tullow, 49.95 percent (operator); Kosmos, 18 percent; Anadarko, 18 percent; GNPC, 10 percent (carried); Sabre, 4.05 percent � � � � � South Deepwater Tano Aker (Norway) was granted Ghana�s license, 85 percent; Chemu Power (Ghana), 5 percent; GNPC, 10 percent with an option to increase to 25 percent � � � Shallow Water Tano Tullow, 31.5 percent (operator); InterOil Corporation, Al Thani Emirates Petroleum Corporation, Sabre, and GNPC, 10 percent (carried) � � Offshore Cape Three Points Vitol Upstream Ghana Ltd., 85 percent; GNPC, 15 percent�some surveying done (Heliconia Energy Ghana Ltd., subsidiary of Vitol), drilling due late 2008 � � Cape Three Points South � Hess, block owner/operator Cape Three Points Deepwater Vanco Energy Company (operator) holds a 28.34 percent interest in the block, with Lukoil holding a 56.66 percent stake. GNPC, the state oil company, holds a 15 percent carried interest. � Saltpond oil and gas field small production of 750 bpd by Lushann-Eternit Energy Ltd. - Saltpond Offshore Producing Company (Lushann-Eternit, 60 percent; local interests, 40 percent); further exploration in area by Oranto Petroleum Ltd./ Stone Energy Ghana Ltd. � � Keta offshore Afren Energy Ghana, 68 percent; Mitsui, 20 percent; GNPC, 10 percent; Gulf Atlantic Energy, 2 percent � � � � Ghana�s big test: Oil�s challenge to democratic development | Oxfam America / ISODEC 23 Details on the unitization agreement are not known, and because of the l

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