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Opinions of Friday, 20 August 2010

Columnist: Atta-Boakye, Ken

Dispute Over The Jubilee Oilfield – Individualistic or Nationalistic.

There is the feeling that the Jubilee Oilfield is apparently, Ghana’s economic breakthrough. Since its discovery, Ghanaians talk with full confidence that Ghana would soon join the middle income nations. Of course, at the thought that oil is the most valuable resource that has no match or equal Ghana cannot be wrong. However, the disputes over the oil production and the emerging evidences of corrupt practices give cause for alarm. Again, African nations that have abundant oil have not performed very well to join the middle income nations yet. Ghana has to take a clue from that and plan accordingly. We should be guided by First Aid first principle: ‘Do first thing first without fuss or panic’

GhAG has studied and reviewed all the information coming out there from the media and especially, the questions posed by oil experts. We need to take advantage of all such valuable information. The oil would be a missed opportunity if we don’t approach the production with caution. It would be sad to fail on our own terms without taking advantage of what has worked elsewhere. Are we the pioneers in oil production? Fact is, it is time to put all the disputes to a close by engaging in constructive discussions with all the major stake holders. These disputes shouldn’t be allowed to grow and fester to affect the production time on schedule. Under our own laws the individuals involved should be accorded their rights for their respective roles played while the nation is also accorded her equal justice to the interest of the citizenry. In a democratic country the rule of law should prevail or else we flout on democracy. How does the rule of law apply on setting up business in Ghana?

An entrepreneur, irrespective of nationality, can set up a business enterprise in Ghana in accordance with the provisions of any of the following legal instruments:
• The Company Code, 1963 (Act 179)
• The Partnership Act, 1962 (Act 152)
• The Business Name Act, 1962 (Act 151)
A foreign investor may team up with a Ghanaian entrepreneur or company for a joint venture, usually in the form of a partnership or a limited company. A minimum equity capital of US $10,000 is required.

Under which law(s) is the oil drilling going to take place? To our knowledge Parliament has not passed a current petroleum oil bill. Why should oil production commence when there are no current laws to govern the production except for the PNDC Law 64, the Petroleum Exploration and Production Law, and the Petroleum Income Tax Law, PNDC Law 188 of 1987? A careful review shows that they are not in the interest of Ghana regarding potential revenue and other environmental impact of the oil exploration.

In the oil business that has generated so much discussion and heated arguments here and there, where do we draw the line in respect of the law? We can draw the line by finding what the contract says. Will the government of Ghana be transparent and release a copy of the contract signed by all the parties on the Jubilee Oilfield to her citizens? Or that is a breach of contractual confidentiality?

The Contract:
1. Who are the major parties to the contract? The media puts it as KOSMOS, GNPC and THE GOVT OF GHANA. To cut a long story short let them go back to the original contractual terms and sort out their differences.
KOSMOS can state its case – The contractual agreement with E. O. Group. When did they start the operations? What role was E.O.Group supposed to play and for what %? Or they are partners. What % was allotted to GNPC and The GOVT of GHANA? How much does KOSMOS intend to sell its share to Exonn Mobil and why should other bidders be blocked?
GNPC can also state its case – With their expert knowledge in oil production how has KOSMOS breached the contract? And what are the options in terms of international standards and Ghana business code?
THE GOVT OF GHANA – Should have the final say in relations to the parties’ contractual obligations and how these have been fulfilled / violated. If there is a clause of “First right of refusal” can Ghana afford to purchase the KOSMOS Energy shares? Or what options will be available?
2. How did World Bank and IFC become stake holders? Who are these entities liable to? Are there other stakeholders? And what are their functions? In case the World Bank and IFC pull out in protest against corrupt practices what will be the upshot? Can Ghana stand by itself?
3. Who constitute the Management Team? How was Strategic Oil and Gas Resources Ltd (SOG) allegedly owned by Tsatu Tsikata awarded the contract with FPSO- Kwame Nkrumah storage equipment? Why are the international partners (World Bank and IFC) not happy with the deal?
4. What does the future hold for Ghana with the Jubilee oilfield? There is now a serious concern about the future of Ghana with the oil fields. What does Ghana stand to gain when there are so many individuals and entities doing everything they can to rip off the nation? How do we protect the interest of Ghana to the benefit of the individual citizens? This is GhAG’s dilemma. Now answer the Costs and Benefit Questions for yourself.

1. What are the financial contributions by the parties to the contract on Jubilee Field?
2. What financial benefits are the parties gaining under the contract in relation to their contributions?
3. How equitable are the profit allocation under the contract, particularly to Ghanaians?
4. If EO group, a Ghanaian corporation owned by few individuals have 3.5% stake in their country’s oil asset, while the entire Ghanaian citizens, over 20 million people have 10% stake under the contract, what happened to “Freedom and justice”? Is the business law fair?
5. If few individuals are allocated 3.5% of our oil resources for negotiating a contract, what percentage would Tetteh Quarshie have been allocated under the precedent about to be established, bearing in mind that the entire initial cocoa pod belonged to Tetteh Quarshie?
6. Could there be the debate that the contract compensates the individuals associated with EO Group for services rendered, or individual greed has taken precedent over national interest?
7. Is there a provision under the contract for an escrow account to pay for massive cleaning and compensations in case of major oil spill or similar disasters? How is it accessible?
8. What hospitals or medical facilities have been built for the healthcare of the poor innocent workers who will experience various oilfield occupational hazards?
9) Any compensation for the fishermen whose livelihood will be affected by the oil drilling?
10). Considering the totality of the circumstances, will it be better to suspend the operation of the Jubilee Oilfield to a future generation, when we will be capable of managing our own natural resources as a country? What can countries similarly situated show for the years of foreign companies’ oil drills on their lands, except corruption, greed, ecological mess, and despair of their citizens, or Ghana should just take the offers under the contract, and make the best under the circumstances?
11) Is this contract analogous to the Bond of 1844, or Ghana is reemerging as “OIL COAST”?

For further information and answers to the questions above contact:
The Interim Running Committee – Ghanaians for Accountable Government (GhAG)

(Our group, GhAG, is a Non-Governmental Organization incorporated in the state of Virginia, USA. GhAG is non-partisan and non-tribal. We are the mouthpiece for the masses in demand for ACCOUNTABILITY from our leaders. The driving principles are leadership, integrity, selflessness, credibility and neutrality. Membership is open to all Ghanaians, either in Ghana or diaspora. New members are always welcome. For membership information, questions and concerns on the above article, please, contact any of the members below) Thank you!

Percy Welsing, Detroit………313. 971-3160
Ken Atta-Boakye, Va…….….703. 986-8438
Robert Hedidor, N.York……..347. 744-4182