Bernard Lamptey (GET) – Oslo, Norway

As Ghana gets ready to join the league of oil and gas producers, the prospect of
the proverbial oil curse looms larger than the ego that some government
officials have suddenly attained. Myths and half-truths have dominated the
airwaves and the television talk circuit. But Ghana Energy Transparency (GET),
an NGO dedicated to getting to the bottom of all the dynamics surrounding our
infant industry, is staunch in its belief that Ghanaians are logical beings, and
that given the facts, they would sift through the blinding myths and arrive at
their own rational conclusions.

Given the Gestapo tactics employed by some communists in the current
administration, it is not surprising that those objective GNPC employees who
spoke to GET about the ongoing impasse between GNPC and ExxonMobil did so on
condition of anonymity. But GET can declare that all pieces of information have
been checked and cross checked, and the facts tell a whole different story from
what is being peddled in the Ghanaian media.

First and foremost, Ghanaians have been told that GNPC has pre-emptive rights to
buy Kosmos’s stake in the Jubilee Field. THAT IS FALSE; there is no part of the
Petroleum Agreement that accords such pre-emptive rights to GNPC.


Next, GNPC claims to have the right of first refusal, which is also FALSE. No
such rights exist anywhere in the Petroleum Agreement with Kosmos. These lies
are designed to throw sand into the eyes of Ghanaians for the sole benefits of a
few selfish individuals.

Another lie GNPC is peddling around is that it is fighting to buy Kosmos’ stake
in the Jubilee Field for Ghana and Ghanaians. That would be true if Ghana had $4
billion. For the past 14 months, some socialist at GNPC have blown the $17
million left in the coffers by the previous GNPC leadership traveling around the
world in search of a loan to buy the Kosmos stake. They have made multiple
trips to India, South Korea, China, Japan, United Kingdom, Norway, France,
Bahrain, Germany and the World Bank all to no avail. The reason is simple; no
one in his right mind would dole out $4 billion to an ex-convict representing a
country with a reputation of cancelling Parliamentary approved international
agreements.

In addition to our inability to raise the money to buy the Kosmos stake
ourselves, the fact that we do not have the requisite expertise and the
technical structures in place to produce the oil suggests that even in the
miraculous event that we find the money to buy it from Kosmos, we would still
turn around and sell it to someone else with that requisite technical expertise
and structure. The Chinese have been mentioned as a viable option. But there
lies the problem. First, the Chinese are not only woefully inexperienced to
handle deepwater operation, they are notorious for bringing in an all Chinese
workforce, thereby depriving Ghanaians of vital employment opportunities.
Furthermore, much of their operational facilities are written in Chinese thereby
limiting our own verification abilities as well as depriving us the opportunity
to learn the industry.

So why are we in a rush to deny a proven world class company such as ExxonMobil
when we know whichever other company ends up with that stake would be less
experienced? Could some people be pushing so hard against the ExxonMobil
purchase because they stand to benefit from a purchase and resale or because
they were denied visas to the United States? Why would a so-called nationalist
government leave more money on the table when it can get more for Ghanaians?

Much has also been said about Kosmos not respecting the laws of the land in the
proposed sale of its stake to ExxonMobil. THAT IS ALSO FALSE. In May 2009,
Kosmos opened a bidding process for its stake in the Jubilee Field. Consequently
as many as 17 international companies turned in their bids until GNPC, on July
17, 2009, ordered Kosmos to stop the bidding process because it had its own
intention of purchasing the stake, which Kosmos readily complied. Now the same
GNPC that ordered Kosmos to stop the open bidding is telling Ghanaians that
Kosmos did not open the sale of its stake to open competitive bidding.

Although GNPC was invited to submit a bid if it was interested to buy the Kosmos
stake, it did not submit one for more than two months until Kosmos informed GNPC
that it would begin considering the submitted bids if it did not hear from them
by the end of September. It was after this time period expired without a bid
from GNPC that Kosmos, being mainly a exploration company , reached a binding
agreement with ExxonMobil for the purchase of its stake. The fact is that GNPC
was given more than enough opportunities to submit a bid to buy the Kosmos
stake, but it could not, and still cannot submit a bid as at today.

Kosmos’ selection of ExxonMobil makes perfect sense. Ghanaians now have the best
oil production company in the world coming in to produce our deepwater crude.
The global oil giant brings to the table the best capability to shoulder the
requisite risk, the best at seeping the last drops of oil from the seabed, and
the best at producing oil in an environmentally safe manner, a quality that
would come in handy should a BP type disaster occur off Ghana’s coast.

On the other hand, GNPC, in spite of all its claims of “buying for Ghana,” is
still yet to submit a bid as at today. Analysts and even some GNPC employees,
concede that it is easier for a camel to pass through the eye of a needle than
for GNPC to be able to buy Kosmos’ stake, and that all this is a gimmick to
pursue individual personal vendettas and acquire illegal personal wealth.

But for the first time, President Mills, through the Ministry of Energy has
decided to put the interest of Ghana ahead of politics and after careful
analysis of the ExxonMobil deal, has written to invite the global oil giant to
Ghana to examine its offer. But just as analysts began to hail that decision as
heading back onto the right track, some radical elements at the GNPC have
undermined the president’s decision by writing to Kosmos rejecting the
ExxonMobil deal. In addition, they have embarked on a media campaign to poison
public opinion using such international outlets as Bloomberg and Upstream. So
who is who in Ghana’s decision making?

In fact the very people purporting to have Ghana’s interest at heart by opposing
the ExxonMobil deal are ironically those jeopardizing Ghana’s interests. Here is
why. Unlike onshore production, offshore production requires the most current
and advanced technology to sap most of the crude from the seabed. Go for cheap
and you risk leaving nearly half of the potential crude oil under the seabed.
ExxonMobil has proven beyond any doubt that it has the technical knowhow and the
financial back bone to invest the requisite resources to sap virtually all the
reserves from the seabed. Thus considering the fact that Ghana stands to get 53%
cumulatively of the oil revenue, why would anyone not want the most oil
produced?

Instead for reasons best known to only them, they would want to deny a sale to a
proven producer and seek to hand it to an entity with sketchy record to produce
Ghana’s oil – for what? Is the fact that ExxonMobil is known to pay no bribes to
local officials and in contrast, the Chinese are notorious for under-the-table
payments playing any role here?

Fellow Ghanaian, here is a reiteration of the facts as GET knows them. One, GNPC
cannot find the money to buy Kosmos’ stake in the Jubilee Field so it is playing
what is known in Ghanaian terms as “Konongo Kaya.” And even if GNPC is
miraculously able to buy Kosmos, without any technical expertise and the
financial reserves for the oil production, it would have to resell it to another
foreign company, thus nullifying the nationalist argument.


Two, not only did Kosmos not break any laws in Ghana, it gave plenty of
opportunities to GNPC to buy its stake, and the latter could not step up to the
plate, and has yet to submit a bid. Analysts agree that GNPC has not submitted a
bid because it simply cannot find the money.


Three, although Kosmos may have erred in the area of information sharing with
ExxonMobil, it was in keeping with a precedence that the Ghana government had
set by its non-enforcement of the contractual provision of the PA. Finally, what
message are we sending to would be international companies that are
contemplating taking investment risks in Ghana? Like one oil executive who moved
his company’s operational headquarters from Lagos to Accra said, “It looks like
we are better off back in Nigeria.” Ouch! That hurts.

Bernard Lamptey
bernlamptey@yahoo.com