[ 2013-06-30 ]

Power, Money, Greed and Oil
The headlines are the title of a documentary shown
on June 24th on The BBC following a Texas energy
company's race to develop the first commercial oil
field in the waters of the Gulf of Guinea - a
process that also involved the efforts and
ambitions of senior Ghanaian Government officials
and numerous other stakeholders. As the work
progresses, director Rachel Boynton travels to
nearby Nigeria - whose own oil reserves have
created a vicious cycle of exploitation with
relatively little appreciable benefit to its
citizens - and questions whether greed is an
intrinsic part of the human character.

I imagine the participants who opened their doors
to this film — Texas oil men, Ghanaian
politicians, private equity executives —
weren’t told it would be given quite this title.
With access to all the main players, director
Rachel Boynton follows the story of a massive oil
discovery in Ghana, the first in the country’s
history, and what it will mean both there and for
big foreign investors. In nearby Nigeria the vast
oil wealth of the Niger delta has done little to
help that country’s poor: will Ghana escape the
same “resource curse”? It’s a powerful film
about global capitalism.

Director Rachel Boyton follows the larger than
life cast as Kosmos, the Ghanaian government and
numerous other stakeholders jostle to realise
their huge ambitions.

The documentary follows the events over 7 or 8
years from the time that George Owusu and EO group
negotiated a contract with the Ghanaian government
to explore for offshore oil. They had no money for
the exploration and went cap in hand to various
companies until George Owusu found someone to
listen. That person was Jim Musselman of Kosmos
Energy in Dallas, Texas.

One scene from the film showed Jim Musselman
visiting the Ashanti King and promising progress
and wealth whilst handing over gifts of 6 bottles
of Whisky and $10,000 dollars for education
funding. A good return for billions of dollars of
oil.

Kosmos took over the contract and EO group became
a minor partner. George Owusu was hired to manage
affairs in Ghana and initially worked out of an
internet café.

Kufour was president when oil was discovered.
Kosmos declared it a world class reservoir but in
very difficult conditions to justify their huge
rewards. When Ata Mills came to power he stated
that he would renegotiate the contract in the best
interests of the Ghanaian people – if
necessary!

A conference was convened in 2008 to discuss the
division of spoils between foreign companies and
the Ghanaian government. The Norwegian model was
examined as an example of how to do it. The man
from Norway calls it ‘the resource curse’ as
the cash machine replaces hard work and
development. The oil money, he says, ‘belongs to
the people of Ghana’. And he’s right. But
then, Norway isn’t Ghana. It doesn’t lack
infrastructure. It isn’t disfigured by poverty
or riddled with suspicions of corruption. If
you’re Ghana and you strike black gold, perhaps
you have little choice but to jump into the arms
of Texan oilmen and hope for the best. And, of
course, no one sees that more clearly than the
oilmen themselves. They keep repeating that high
risk requires high rewards , it was a huge risk to
come to a country that had no oil! There were 3
foreign companies but Kosmos were first to sign up
and received exceptionally favourable terms. The
revenue was split 10% for GNPC, 5% royalties and
35% tax.

Rachel Boynton’s film is a patient, even-handed
affair and all the more depressing for being so
predictable. The various manoeuvrings see
interests placated, promises broken, bucks passed.
Eventually, the oil is still mainly in the ground
and Ghana’s back where it started. There was the
crushingly inevitable postscript though – after
one year of production, the scores on the doors
are as follows; foreign oil companies: $2 billion;
the Ghanian exchequer: $444 million. Did anyone
not see that coming?

In May 2011 Kosmos floated on the US stock market
valued at $6billion US - purely on the basis of
its Ghanaian oil interests. George Owusu sold his
shares and pocketed $100 million.

Alongside this story about Ghana there was a tale
of over 50 years of oil production in Nigeria
where the life of the average Nigerian has
worsened in this time. Nigeria is amongst the
largest oil producers in Africa and the 5th
largest supplier of oil to America. Between 1960
and 1999 Nigerian officials stole or wasted
$440billion. The country is consistently rated as
one of the most corrupt in the world. The film
showed ‘Refinery Road and a huge black market
operation dealing in illegal condensate fuel
syphoned off from the pipelines.

The question left hanging was where would Ghana be
in the next 10 or 50 years.

Source - R Holden

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