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Arabica Robusta

allAfrica.com: Ghana: Making Judicious Use of the Oil Revenue - 0 views

  • More oil finds would help ease the burden on the cedi, which is slipping badly against the major currencies. The cedi was quoted at almost one to one with the dollar, when the nation went to the polls in December 2008. It dropped sharply against the major currencies when the then incoming Trade Minister, Ms. Hannah Tetteh, dropped her infamous 'Ghana is broke' bombshell. The cedi then rallied, according to an official pronouncement, "as a result of prudent" economic measures put in place by the government. It is beginning to look like the measures are no more holding. At the last count, the cedi was being exchanged for the dollar at GH ¢1.53, an indication that the national currency has depreciated by about 30 percent in recent times.
Arabica Robusta

Ghana Oil Bill May Improve Credit Rating, Spur Loans, IMF Says - Businessweek - 0 views

  • The law, passed on March 2, allows oil revenue to be used as collateral for loans in a “credit enhancement” program, said Wayne Mitchell, resident representative for the fund, based in Accra, the capital. The risk of default is reduced, which will lower interest rates, he said.
  • A provision to keep 21 percent of the revenue in a stabilization fund for the country to fall on in times of price volatility and a heritage fund with 9 percent of earnings saved for the future is “best practice,” Mitchell said in an earlier interview on March 2.
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    The law, passed on March 2, allows oil revenue to be used as collateral for loans in a "credit enhancement" program, said Wayne Mitchell, resident representative for the fund, based in Accra, the capital. The risk of default is reduced, which will lower interest rates, he said.
Arabica Robusta

Union Man: Where are the jobs? | Pipe(line)Dreams - 0 views

  • When Ghanaians found out there was oil off their coast, a sense of excitement spread across the country. Optimistic and at times unrealistic statements from various company officials and ministries added to expectations.
  • Francis M.K. Sallah is the Regional Industrial Relations Officer for the General Transport, Petroleum and Chemical Workers’ Union. Lately he has been hearing a lot about jobs, or the lack of, in the oil industry.
  • The Ghanaian government says that 90% of the oil jobs should go to Ghanaians by 2020, but some people in the industry wonder why the government isn’t being more aggressive. Sallah says that right now Ghanaians could occupy more than half the posts. Welders, pipefitters, painters, maintenance people – there are plenty of skilled laborers in Ghana, so what’s keeping them from getting jobs?
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  • Yeah, I know a lot of jobs in the oil industry require technical skills and education. I grew up around the oil industry. My father was a petroleum engineer. But he started work as a roustabout.
  • Something is preventing Ghanaians from getting work and it’s hard for me to understand.  After all, the oil men who are hanging out at the hotel bar in Takoradi are mainly working class guys from Texas and Louisiana who are in Ghana via the Gulf of Mexico or E.G. (that’s Equatorial Guinea). What degrees do they have?
Arabica Robusta

Oil, Money and Secrecy in East Africa - Pipe(line)Dreams - 0 views

  • Last year I wrote a post on Tullow Oil’s secret deals in Uganda, contrasting that situation to Tullow’s much more transparent operations in Ghana. After I published that story a Tullow Oil representative contacted me and explained that Tullow’s practices were dictated by local governments. Tullow can be transparent in Ghana because the government wants to be transparent. In Uganda, the official told me, the government does not want contract information published.
  • While offering general endorsements of transparency, oil companies typically defer actual requests for contract and other information to governments. “I have tried to communicate with them but they instead refer me to local government officials,” said Kuich, the South Sudanese freelance journalist. Levi Obonyo, former chairman of Kenya’s independent Media Council, says bluntly that oil companies hide behind governments to avoid public scrutiny.
  • We shouldn’t forget that the S.E.C. adopted rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring oil and gas companies to disclose payments to foreign governments (section 1504). At the time, The Wall Street Journal reported that,  “The rules for section 1504 set a $100,000 threshold, below which companies would not have to report payments. The rules do not contain exemptions for reporting “confidential or competitively sensitive information” or exemptions for instances in which reporting the payments might violate foreign laws.”
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  • The American Petroleum Institute filed a lawsuit agains the S.E.C. in October 2012, which would suggest that a number of oil companies are happy with the secrecy status-quo.
Arabica Robusta

Ghana, Ivory Coast dispute over oil field likely to aggravate | Business - 0 views

  • The oil was discovered in the western part of C100 which extends to the Tano basin, and it’s home to several fields including Ghana’s Jubilee. This latest development could have some implications if Ivory Coast decides to develop this field.
Arabica Robusta

Jubilee Oil Field Partners Can Flare Gas Against Ghana's Laws - Energy Analyst | OMGGha... - 0 views

  • An Energy Analyst, Muhammed Amin Adam has told Citi Business News, the current delays in the completion of the gas infrastructure project could allow the Jubilee Oil field partners minimum flaring opportunity.This is as a result of the current operational challenges government is having with the lead contractor on the SINOPEC project.China’s SINOPEC has threatened to abandon the project following serious financial challenges government is confronted with in paying SINOPEC for pre-financing the project.
  • “in this case the law also allows that you can flare for operational reasons and you can flare when you are compelled to. So in this circumstance when we are not ready with our gas infrastructure they are compelled to flare, in that case we will have no course to make any case against them”.
Arabica Robusta

Oil Boom Is Vote Curse for Ghana's Mills as Cedi Slumps - Bloomberg - 0 views

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    Where is the sterilization fund?
Arabica Robusta

African Democracy and Oil: A Combustible Mix | Revenue Watch Institute - 0 views

  • I was motivated by the conviction that parliaments are central to good governance—representing the voice of the people, making laws and holding the executive to account. I still believe that, but the complex challenges posed by oil wealth in today's Africa means parliaments across the continent struggle to fulfil these roles.
  • The message was clear: to be an MP representing the voice of your constituents against the interests of the elite can be dangerous. African MPs need not only to be wealthy, but also brave.
  • Tribalism is never far beneath the surface and is a major barrier to achieving a national consensus. For many Africans, tribal allegiances are strong, but there is weak identification with the nation. Crafting unity in a nation created by imposed colonial boundaries remains a distant concept—witness the imminent breakup in Sudan—and often impedes efforts to garner widespread support for a national oil or mining policy. Failed efforts to build national consensus around policy objectives can lead to situations like Ghana's, where the country has begun oil production without coming to agreement on a national oil policy, instead following an outdated law drafted in 1984 with few regulations to ensure the country derives the maximum benefit from its finite resources.
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  • Oil laws are still written without a national consensus on the role of the oil sector in the country's development. Detailed regulations are unwritten or unenforced. Lack of information and knowledge leave MPs with formal power but no means to actually hold government to account.
  • Foreign oil companies and their contractors effectively regulate themselves in places like Ghana and Sierra Leone. The lack of explicit regulations gives too much leeway for officials' discretion in approving activity, and too much risk of their making personal gain from their official position.
  • Most Ugandans I met assumed that they had been sold short by either their government or the oil companies. In fact, in my review of the contracts the Ugandan government negotiated, the agreements were tough and compared favourably with other countries.
Arabica Robusta

Oxfam: Ghana's New Oil Law Leaves Room for Financial Mistakes | Africa | English - 0 views

  • Ghana could suffer a similar future, Oxfam Policy Manager Ian Gary says, if the country does what its neighbors did and uses oil revenue as collateral for government loans.
Arabica Robusta

Attacks on the Press: Oil, Money, and the Press - Committee to Protect Journalists - 0 views

  • Whether all this oil will benefit the average citizen depends largely on whether extraction deals are handled in an open, transparent manner. A comparison between Brazil and Nigeria is instructive. The South American country provides monthly updates on oil production on a state website. Brazil became the seventh-largest economy in the world with the help of oil output, with 2011 per capita income of $12,594, according to World Bank statistics. In Nigeria, five decades of oil output have been mired in secrecy and conflict. Although the country's oil exports are comparable to those of Brazil, its per capita income is just $1,452.
  • While Uganda's 2005 Access to Information Act theoretically covers documents between the government and private companies, oil contracts typically have special provisions whereby both parties must consent before information is given to a third party, according to Gilbert Sendugwa, coordinator of the Africa Freedom of Information Centre in Uganda. The secrecy clauses prevent even parliament from getting key information, according to Dickens Kamugisha, chief executive of the Africa Institute for Energy Governance, a Kampala-based think tank that advocates for transparent energy policies.
  • Since few Ugandan authorities comply with requests under the access law, few journalists bother to use it. Sendugwa noted that all government ministers are required to report how they implement the information act. "We decided to test the law and sent an information request to parliament in November 2010 asking for the ministers' reports on their implementation of the Access to Information Act," he said. "To this date, none have complied."
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  • The anti-corruption research organization Global Witness also analyzed the bills and concluded that all three lack guarantees on contract and financial transparency.
  • Though the act offers broad assurances that oil information is public, a provision allows the ministry to determine whether or not a particular oil contract is published, said Dana Wilkins, a campaigner for Global Witness. No contract had been made public as of late 2012.
  • Officials and oil companies in Uganda try to control the message by providing organized tours of oil drilling facilities. The Ministry of Energy and Mineral Development's 2011 communication strategy paper recommends two media tours of the Albertine Graben oil-drilling area each year. "Sure, it's easy to go to oil areas for oil company-organized events," Ssekika said. "You can talk to district officials, etc. But when you go alone with your own view, that's a different story."
  • "When China National Offshore Oil Corporation [CNOOC] struck a deal with Tullow Oil to develop Uganda's fields, it warned [President Yoweri] Museveni that there wasn't time to wait for parliamentary debates over the issue--pausing now could mean Uganda losing its winning lottery ticket to Kenya," Lay wrote on the African Arguments news website. Tullow's communications manager in Kampala, Cathy Adengo, disputed that depiction. "Tullow did not push the Ugandan authorities into doing anything, considering we had a two-year wait to ratify the deal with CNOOC," Adengo said.
  • The company has faced further lawsuits over pollution in the Delta and alleged ties to the Nigerian military, according to Reuters. "Imagine, it took a court case launched in America before activities of oil companies were discovered," said Omoyele Sowore, publisher of the anti-corruption website Sahara Reporters and a former Niger Delta resident. The legal disputes resulted in an estimated loss of one million barrels of oil a day for the Nigerian government and private companies, according to Nigerian writer Orikinla Osinachi.
  • Oil revenues count for 80 percent of the national budget, yet the government is unable to determine the amount of oil extracted from its territory, according to Alex Awiti, an ecologist at Aga Khan University in Nairobi.
  • Nigeria's situation is not unique. Although Angola is the second-largest oil producer in Africa with an annual GDP of $101 billion and per capita income of nearly $9,000, more than two-thirds of its 8 million people live under the $2-a-day poverty line, according to the World Bank and news reports. These statistics, said Awiti, are rooted in the lack of transparency in Angola's oil production--leading to corruption, millions of dollars being stashed abroad, and revenue sequestered in a secret "parallel budget." In 2012, the International Monetary Fund attributed a $32 billion gap in Angola's state funds from 2007 to 2010 to "quasi-fiscal operations by the state-owned oil company."
  • With oil output still in early stages in East Africa, the region has time to learn from other oil-producing countries. Chad has drilled oil since 2003, with the contracts kept secret. "The fact is Chadians do not know how many barrels are actually produced and where the money goes," said former N'Djaména Hebdo journalist Augustin Zusanne, who now works for the United Nations. Without such information, residents can hardly press for more development. "Even the oil-producing region, Doba, does not benefit from oil revenues. The population of this area lives in poverty," said Eric Topona, a journalist with the state broadcaster. However, things might improve, as Chad is now a candidate for membership in the Extractive Industries Transparency Initiative (EITI), an international forum that seeks openness by ensuring that oil payments are published annually. Government officials, oil companies, and civil society organizations oversee the process.
    • Arabica Robusta
       
      Does the EITI truly help encourage countries to be transparent?
  • In its 2008 Oil and Gas Policy, Uganda said it would apply for membership in the EITI, but it did not say when and nothing has been implemented, according to news reports. "The way the EITI section is drafted clearly shows a government that is not sincere or ready to implement--it's so vague," Kamugisha of the Africa Institute for Energy Governance said in describing the Ugandan policy. Kenya has made no commitment to join the Initiative. Eddie Rich, deputy head of the EITI secretariat, confirmed that South Sudan and Uganda have made public commitments to implement the initiative and said "international partners are working with those governments to progress toward official applications." None of the African countries working with EITI are disclosing information on compensation to local people affected by oil production, Rich said.
  • But East Africa does not have to look overseas for mentors: Ghana, Liberia, and even the Democratic Republic of Congo publish oil contracts. "It took years, but contracts are now in the public domain," said Ghanaian development economist Charles Abugre, who vigorously campaigned for publication.
Arabica Robusta

West Africa Rising: Will a sovereign wealth fund really help reverse Nigeria's 'oil cur... - 0 views

  • On Dec. 1 last year, Nigeria’s cabinet approved the creation of a sovereign wealth fund that would invest any excess revenues generated from the sale of the country’s oil, which it exports at a rate of roughly two million barrels per day.
  • This isn’t the first time that the country has made such an effort. In 2003, under pressure from the International Monetary Fund, Nigeria set up the Excess Crude Oil Account, or ECA, to serve a similar purpose.
  • If Nigeria’s new fund succeeds in delivering tangible infrastructure improvements and other development outcomes from its oil profits, the country could become a role model for other poverty-stricken but resource-rich countries in West Africa.Ghana just began pumping oil in December, and significant reserves have recently been found off the coasts of Liberia and Sierra Leone. No doubt those countries will look to their larger neighbor to the east, the region’s economic heavyweight, in deciding how to manage their own oil revenues.
Arabica Robusta

Exxon Said to Pay $4 Billion for Stake in African Field - NYTimes.com - 0 views

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    "While major companies like Exxon have focused on developing large oil and gas projects, much of the riskier and more prospective exploration has been undertaken by smaller, independent producers like Anadarko Petroleum, Tullow Oil and Kosmos. "
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