Ghana needs vision to turn resources into blessing

The Executive Director of ISODEC, Bishop Akologo, has said that Ghana can make a difference in Africa by turning her natural resource endowments into lasting benefits, if she has a vision for the extractive sector.

He said Ghana needs a strategy that defines, articulates and enforces defensive and offensive positions on how to interface natural resources with the entire economy. This may result in an open, price neutral but key role for the State and in the process be tough on corruption and rent-seeking.

For this to succeed, he called for the empowerment of civil society organisations, the media and the legislature to have oversight responsibilities in the extractive sector. He said this when he made a presentation on "The New Petro-Country Ghana-A New Model for West Africa?" at an oil conference in Oslo, Norway.

Under the theme, "Oil for what Purpose and for whom?" the conference was organised by Populus and three other member organizations that are involved in an information project that examines the possibility of a break with what they may call "the fossil fuel economy".

The project is on a model society and economy based on sustained growth in consumption of goods and services produced by polluting energy sources like oil and gas.
The group believes that while the North, primarily served on and powered up the system, it is the South that bears the heaviest burdens and likely would have to take the lead for change.

Bishop Akolgo noted that even before the triple crisis; food, fuel and finance, poor countries faced structural rigidities and could not build their national economies which were responsive to shocks and trend changes.

Therefore, a new type of economic adjustment to re-examine relationship between structural adaptation and long-term economic development was needed to build economies to respond better to shocks and trend changes in the environment and take advantage of opportunities.

"Natural resource endowments are the potential catalyst for structural change ambition, but currently they are not. Transparency, accountability and participation in the management of natural resources is necessary," he said.

He recalled that hydrocarbon exploration in Ghana started in the late 19th Century in the Western Region of Ghana in the onshore Tano basin (in 1896); Saltpond offshore production begun with 4,800 b/d in 1976 down to 480b/d in 1985.

The Saltpond Field was redeveloped in 2002 and is now producing 500 b/d. He disclosed that at present, Ghana adopts the open door policy of concessioning. As a result of this, with the two major discoveries in 2007 by Kosmos Energy Ghana HC (Kosmos) and Tullow Ghana Limited (Tullow), Ghana stands the chance of being the next oil industry hub in West Africa, with production expected in 2010 starting with 120,000 barrels/day and building up to 250,000 per/day by 2015. Current exploration activities include Vanco Energy at the Cape Three Points Deepwater; Kosmos Energy at the West Cape Three Points; Tullow Energy at the Deepwater Tano; Amerada Hess at the Cape Three Points, among other companies in data review/ negotiations.

According to Bishop, ISODEC?s key policy and advocacy goal is to "secure policy space for citizens to engage their governments to construct autonomous development of their countries. This includes securing their resource base and cherished values" in the sub-region.

ISODEC's vision, he revealed, is for Ghana to be an integrated and fully developed energy country, and a key driver of a sustainable and flourishing local and regional economy, while attaining global competitiveness in all of its sub-sectors by 2020 in the Gulf of Guinea.

In view of this, he hoped the extractive sector would operate transparently with the full support of the government.

In addition, he said Ghana needs to transform structurally and diversify its economy using natural resources as catalyst.

"Given the strategic importance, potential and scope, the energy sector will be a major driver for economic development, while providing a platform for significant development of people, enterprises, the capital market and innovation and technology," he stressed.

This, he said, will allow Ghana an opportunity to use the energy sector as a catalyst / agent for sustainable development and diversification of the national economy.

Mr. Akolgo also said although host countries own the petroleum resources, they need international oil companies to provide efficiency, particularly in the area of state of art technology, modern field practices, risk capital, efficient operational management and cost efficiency through competitive benchmarking.

Since the oil was for a nation, he said oil companies must be able to cooperate with government authorities and must have reasonable expectation or rewards. Bishop cited Norway and Trinidad and Tobago as models to learn from, as well as Nigeria (how not to do it and some ideas on reservoir management).