By George H. Wittman on 1.22.10 @ 6:06AM

What happens when you take one of the world's most promising offshore oil and gas finds and mix it with a combination of Texas money and African ambition? If this combustible mixture is placed in the Gulf of Guinea within the legal waters of Ghana, the answer is trouble -- lots of it.

To put this roiling situation in perspective, note that the initial valuation of the richest site found so far was reportedly $4 billion, the amount ExxonMobil was asked to pay for a stake in the Jubilee field held by a joint Texas/Ghanaian private corporate partnership.

The excitement created by the news of the oil strike offshore Ghana in 2004 has continued to this day, influencing all aspects of the country's economic thinking and politics. The atmosphere in Accra's government and commercial offices is a combination of their inherited British restraint and natural Ghanaian exuberance. In other words, Ghanaian officialdom, business and the public-at-large just can't contain their excitement -- though they try. Finally the great bonanza has arrived for Ghana that had been hoped for all these years after neighboring Nigeria's own oil and gas development.

Nothing is simple in West Africa, and Ghana is no exception. To begin with, the former president, John Kufuor, apparently was involved in encouraging two of his allies, Kwame Bawuah-Edusei and George Owusu, to form a Ghanaian -- turned Cayman Island -- company to bring in American technological and financial assistance to participate in the exploitation of the offshore deposits.

Kosmos, a Texas-based company that includes among its investors the financial firms of Blackstone and Warburg Pincus, was a natural selection. In 2007 its operations paid off and commercially exploitable quantities of oil were found. George Owusu, who has a residence in Houston, had worked in various aspects of the oil business before becoming the Kosmos rep in Ghana. He provided the business knowhow while Kwame Bawuah-Edusei, named by then President Kufuor as ambassador to the United States, provided the political entrées in Accra. The partnership of Owusu and Edusei now owns three and a half percent of the Kosmos oil block. This stake is reported to have an eventual worth of up to $200 million.

Unfortunately, this relatively simple oil deal becomes far more complicated when the politics of the project are taken into consideration. The current president of Ghana, John Evans Atta Mills, who has been in office only a little more than a year, has decided that the entire deal was structured to benefit his predecessor and his followers. Magnanimity in victory is not necessarily the usual West African custom -- especially if there are hundreds of millions of dollars involved.

To understand the evolution of the investment environment of Ghana, one has to reach back to the newly independent days of the nation a half century ago. Perhaps the most telling quote of that period was that of the Ashanti activist, Krobo Edusei, the interior minister in the first post-colonial government of the famed African socialist, Kwame Nkrumah. In response to questions posed about the exceptional wealth being accrued by "socialist" politicians, Edusei was reported to have said, "Socialism doesn't mean that if you've made a lot of money, you can't keep it."

Krobo Edusei , who died in 1983, had become a leader in the extended clan to which Ambassador Kwame Bawuah-Edusei of today belongs. The elder Edusei clearly believed one of the perks of his political position was the acquisition of wealth. Perhaps to flaunt this view, his wife famously purchased a gold-plated bed. Krobo Edusei personified the traditional West African sense of privilege that has made rich men of most of the vast region's winning politicians. The custom continues today, though not that different from elsewhere in the world -- just more blatantly.

It is hardly a surprise that former President Kufuor now finds himself involved in an investigation by the new administration along with George Owusu and Amb. Kwame Bawuah-Edusei. The current attorney general has been reported to have compiled a criminal case against these latter two newly minted millionaires for using "improper influence" in gaining advantages for themselves and Kosmos from the previous government.

Supporters of Edusei and Owusu allege that the Ghana National Petroleum Corporation, the state oil company, has as its real aim the canceling of the ExxonMobil deal so that GNPC can obtain the Kosmos stake and sell it to the Chinese. Local journalists are trying to track down how members of the new Mills government would benefit from this arcane financial deal. Meanwhile the U.S. Justice Department has become involved in the case to see if any American laws were broken.

And so it goes as Ghana's expected oil wealth is fought over well before the oil and gas fully comes on line. Production has been estimated eventually to reach 120,000 barrels per day by 2011. A more conservative reckoning has production at 40,000 barrels, with peak production being reached by 2018. At either figure, it means a bonanza for Ghana.

There may not be any gold beds involved, but Ghana's politics doesn't seemed to have changed that much in fifty years -- except the amount of money changing hands is much higher and the corruption far more sophisticated.