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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

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

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. "
Arabica Robusta

Oil City: Where are the Jobs, pt. 2 | Pipe(line)Dreams - 0 views

  • Both Tullow Oil and Kosmos Energy have posted scam alerts on their websites. Here’s the warning from Kosmos: NOTE: POTENTIAL RECRUITMENT FRAUD Kosmos Energy has learned that job applicants in the international oil and gas business, as well as other industry sectors, may be contacted by individuals or organizations that offer false employment opportunities. These communications are often via email and may request personal information or money. Kosmos only makes job offers after candidates have completed a formal interview process and does not ask applicants to pay fees during recruitment. Specifically, please note that any communications from or about the “Kosmos Group” are not associated with Kosmos Energy. This is good, but I don’t know how useful these alerts are. There are a lot of people in Takoradi who don’t have internet access. And even when you get to the Tullow or Kosmos websites, it’s not easy to get information.
    • Arabica Robusta
       
      Corporate websites as greenwashers.  They know that consumer "stakeholders" are the audience because producing areas have very limited access to Internet.
Arabica Robusta

allAfrica.com: Africa: A New Frontier - the Rush for Oil and Gas in East Africa - 0 views

  • Just a few miles from Rukwanzi six Congolese were killed in September 2007, shot at by the Ugandan army while they travelled in a passenger ferry from the island to the DRC shore. It was revealed last week that Heritage Oil and Gas, the British wildcat explorer founded by former mercenary Tony Buckingham, played a key role in triggering that military operation after its staff had crossed illegally into Congolese waters.
  • The reckless actions of a British oil company could conceivably have led to war. That it did not reflects Congolese weakness and Ugandan calculation. There were fears in Kinshasa at the time that Jean-Pierre Bemba was likely to return from Belgium with Ugandan support. Laurent Nkunda's CNDP was engaged in its strongest offensive to date in North Kivu and the old Ugandan interventionist tendency was increasingly on show.
  • Now the oil majors are entering the market, they are using a different argument - that the wider regional choice means they must be incentivised to invest in one country over another. When China National Offshore Oil Corporation (Cnooc) struck a deal with Tullow to develop Uganda's fields, it warned 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 or Ethiopia.
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  • A lot has changed since the tragic events of 2007. The oil and gas rush is now a regional phenomenon. Amidst all the excitement of deal-making and discovery, it may prove to have political and economic effects that few are predicting today.
Arabica Robusta

Report card: Ghana oil gets a "C" | Pipe(line)Dreams - 0 views

  • the most encouraging sign was not the grades on the report card, but the presence of several officials at the event including a member of parliament, the communications director from Tullow Oil, the World Bank country director for Ghana and a Deputy Minister of Energy. Although some of the officials’ comments were perfunctory and fairly predictable, their attendance at least signaled the recognition of civil society as an important stakeholder in Ghana’s oil development. 
    • Arabica Robusta
       
      Will this continue, or are the hegemonic organizations present simply to grease the skids and get petroleum exploitation started?
  • On transparency and citizen participation, for example, the government received “B” grades. Regarding transparency, the report states, “On the positive side, Ghana’s parliament passed the long-delayed and debated petroleum revenue management bill at the beginning of March 2011. The bill is now awaiting presidential approval. While some issues were hotly debated, there was consensus from both the majority and the minority members of parliament on all the transparency provisions. Should the bill approved by parliament become law, there will be a number of important transparency provisions.”
  • Of particular concern is the lack of a legal framework for dealing with oil spills: “The institutional weakness in the environmental protection institutions was demonstrated during the investigation into mud spillage by Kosmos Energy.
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