Boundary Dispute Over Oil - Ivorian Claim Has No Merit

“For this nation, the issue should not be whether the oil and gas resources will be a Blessing or a Curse; it is an imperative that the Oil and Gas resources should be a Blessing and Nothing Else,” Concluding statement by CEO of GNPC, Nana Boakye Asafu-Adjaye, at the opening of the 63rd Annual New Year School at the University of Ghana, Legon on Monday, January 9, 2012.



Boundary Dispute Over Oil



Ivorian Claim Has No Merit



… No State can change its borders with a unilateral stroke of the pen on a Map” – GNPC Boss



By J. Ato Kobbie, Managing Editor – The Business Analyst

The claims by Cote d’Ivoire, extending its maritime boundary with Ghana, will not disrupt the tempo of the country’s exploration and production efforts, since the new claims do not have merit.

Commenting on the maritime boundary dispute between the two countries for the first time, Nana Boakye Asafu-Adjaye, Chief Executive Officer (CEO) of the Ghana National Petroleum Corporation (GNPC) said records available to GNPC show clearly that the border, which has been accepted for petroleum exploration agreements over the years since both Ghana and Cote d’Ivoire began to undertake exploration activities has been clear and undisputed all this time.

“Obviously, no State can change its borders with a unilateral stroke of the pen on a map,” he stressed, adding that the new claims will have to be justified in accordance with international law and that international procedures were underway to settle it.

The GNPC Boss was speaking at the 63rd New Year School and Conference, under the auspices of the Institute of Continuing and Distance Education, of the University of Ghana, Legon, under the theme: ‘One year of oil and gas production: Emerging Issues.”

Stressing on the essence for national discourse on the subject of oil to be based on accurate information, Mr. Asafu-Adjaye said, as the national organization charged with significant responsibilities in respect of petroleum exploration and production, GNPC was happy to resource the discussion with that and with “perspectives reflecting more than 25 years of work and institutional thought preparing for the situation Ghana finds itself in today and for the opportunities and challenges large scale oil and gas production will pose for national development.”

He pointed out that “while this past year has seen the first year of production from the Jubilee field, this is not the first year of commercial oil production in Ghana.”

After taking participants through a brief history of Ghana’s oil production, which included production from the Saltpond Field, Mr. Asafu-Adjaye explained that Jubilee production over the last year has inaugurated a new era in oil and gas development and production in Ghana, “into production levels far beyond anything that we have ever achieved and positions the O&G sector immediately as a major foreign exchange and revenue earner.”

He stated further that the Jubilee success has opened up the potential of the other parts of the deepwater Tano basin, and led to a string of other discoveries, galvanizing industry interest in Ghana’s three other basins in a way that suggest that Jubilee is just the beginning.



“Sometimes, the expectations you hear relating to oil seem rather unrealistic, particularly when you remember that our country used to be known as the Gold Coast,” he wondered.



120,000 Jubilee Target Miss



The GNPC Boss dismissed assertions in some circles that the unavailability of a national gas infrastructure was the cause of the Jubilee Field not reaching its 120,000 bopd (barrels of oil per day) peak production projected for the second half of 2011.



Citing as reason for missing the target, he quoted from an interim management statement by Jubilee Field Operator, Tullow Oil Ghana Limited, of November, 2011, which read “Recently, production rates have been below expectations due to mechanical issues in certain wells related to the design of the well completions. Such problems are not unusual for a new field development of this type and remedial work is currently ongoing,” Mr. Asafu-Adjaye described the assertion as untrue.

He said Jubilee production increased steadily from the initial rate of 45,000 barrels of oil per day in January 2011 to about 80,000 barrels of oil per day by the end of the first year of production.

He offered highlights for on the issues of job creation, training and local capacity-building, and the intersectoral linkages that must underlie the future of oil and gas production in Ghana, for participants.

The GNPC boss said while the question on the lips of many Ghanaians, since the discovery of significant quantities of oil and gas in the Jubilee Field has been: ‘whether our oil find will become a blessing or a curse,’ and if the country was doing the right things to ensure the resource is a blessing.

The GNPC boss said eight (8) exploration wells were drilled in 2011, out of which six resulted in oil, gas and condensate discoveries, representing 75% success rate as against an industry average of 10%.

Over the next five years, subject to the approval of PODs, we expect commercial development and production from the Tweneboa Eyenyera complex, Sankofa, the rest of the Jubilee field, North and South Tano fields and the Teak field.



Legal Framework



With reference to the laws establishing GNPC, PNDC Law 64, the Petroleum (Exploration and Production) Law, PNDC Law 84, and the Petroleum Income Tax law, Mr. Asafu-Adjaye debunked suggestions in some circles that there is no legal framework governing petroleum operations in the country.

“ I must emphasize that claims that have been made about GNPC being the regulator are, simply, not correct. No regulatory role was ever assigned to GNPC under the laws governing the petroleum sector,” he averred.

He said these laws, which were promulgated in the 1980s differentiated petroleum exploration and production from the rest of the mining sector so that rather than having laws on mining govern petroleum, a petroleum-specific system of rules and institutions were now put into place.

He said the existing framework has further been enhanced by Government enacting the Petroleum Revenue Management Act (PRMA, Act 815) in April, 2011, demonstrating its commitment to transparency, accountability and good governance.

He disclosed that GNPC was working to strengthen its capabilities so as to emulate the example of national petroleum companies like Petrobras, which has taken Brazil’s involvement in the petroleum industry to new heights, technically and financially, creating enormous value for the Brazilian nation.

Emphasizing the importance of GNPC’s role in exploration, he said “With the active involvement of GNPC there is a better chance of partnership and the advancement of a more national agenda as has also been evident in the experience of national petroleum companies around the world.”



He explained that it is the national role of the Corporation, partnering all companies in the exploitation of the country’s petroleum resources why ownership of all data and information obtained from the conduct of petroleum operations under a Petroleum Agreement is vested in the Corporation (section 23(2) of the Petroleum (Exploration and Production) Law).



He said it was this role that led GNPC to object to Kosmos Energy providing data on its activities in Ghana to some 26 companies in different parts of the world.

“From the national point of view, we in GNPC believe that it was absolutely important at this stage of the development of the petroleum industry in Ghana that the laws of Ghana must be respected so that companies do not imagine they can do as they please,” he stressed, adding that “With the backing of the Government, we believe this message rang out loud and clear to the whole international petroleum industry.”



On the roles of the Ministry of Environment, Science and Technology and the Environmental Protection Agency (EPA) in the handling of a chemical spill involving Kosmos, he said the signal that protecting the environment is an important goal of national institutions in Ghana was clearly relayed.



“For this nation, the issue should not be whether the oil and gas resources will be a Blessing or a Curse; it is an imperative that the Oil and Gas resources should be a Blessing and Nothing Else,” Nana Boakye Asafu-Adjaye, concluded.



Author: j.atokobbie@yahoo.com;thebusinessanalystgh@gmail.com