SECURING THE NATIONAL TERRITORY IN DEFENSE OF BLACK GOLD

Energy Minister, Boakye Agyarko

By Dora Addy

Oil is strongly surging the country’s economy, and the country’s total revenue from January to September in 2016 was $237,872,587.90, according to figures released by Cedi Talk.

But, Ghana’s black gold discovery may be on a path of uncertainty, while the long-dispute between neighboring Ivory Coast and the country is being contended at the law courts at the International Tribunal for the Law of the Sea (ITLOS) in Hamburg, Germany.

At the moment, Tullow Oil, through its TEN project cannot drill new oil wells at the disputed West Cape Three Points area, a move that will surely cause some economic stress to the country. The disputed area is said to be holding some 2 billion barrels of oil reserves and another 1.2 trillion cubic feet of natural gas, while business prospects reach into some $ billion 4.9

While the country is involved in a maritime dispute with Cote d’Ivoire since 2014, when the latter made claims of ownership of parts of the oil and gas rich Cape Three Points, the future of oil may be threatened, and key oil company Tallow may soon halt business activities in the Tweneboa-Enyenra- Ntomme (TEN) Project oil field, until the dispute is finally resolved at the ITLOS.

Alassane Ouattara

Now that the country is already spending so much on arbitration processes, a report from the Public Interest Accountability Committee (PIAC) has shown that since January to June last year, some $2.11 million were spent on the dispute, by the Ghana National Petroleum Council, representing 25% of the company’s total allocation for the exploration and equity financing for the year.

As the country veers towards upgraded economic era and growth, and while oil also plays a special role in determining the country’s economic strengths through the necessary trade and partnership agreements, Ghana looks forward to a successful arbitration where it can continue to journey on a smooth path of oil production and continue on its path of regional and economic fulfilment.

Slowly, but steadily becoming one of the economic meccas in the West African region through the founding of oil, coupled with other natural mineral resources, the country looks to polish her economic gains, while pushing the efforts for more development in the oil sector; already, other discoveries have been made aside Cape Three Points, adding on to the oil stock.

The bastion of all the country’s claims to the full ownership of Cape Three Points in the ongoing dispute at the ITLOS is that the neighboring Cote d’Ivoire’s claims of ownership over parts of the Cape Three Points is baseless, providing that Cote d’Ivoire’s claims are entirely out of context, and that their claims cannot be based on delimitation. These statements have been made by the Attorney General during the first hearing at the ITLOS.

The country is strongly represented at the arbitration front, and looks forward to drilling new wells around the West Cape Three Points.

While Ghana looks to match up her efforts with other oil-producing giants, the threats of slowing down oil production at the TEN sites could counteract efforts to increase oil volumes. Ghana has strong hopes in oil production, as an added discovery to our existing raw materials and cash crops, which are doing well for our GDP.

Halting of new oil  wells at the TEN Project site would also mean huge losses, through deterioration of equipment which are already expensive to acquire and even more expensive to repair. The oil wells also risk spoil during the long halt. While the country is bringing in top experts for oil production, such equipment for rigging and production are also brought in by prospective companies and their groups at such a high price- several millions of dollars!

Until then, our hopes for a prosperous TEN Project through more oil wells is being held on until the latter part of 2017, when judgment is given.

COMPROMISING JUDGEMENTS AND RAISING HOPES

Already, the country stands in a position of gaining some economic advantages as a compromising judgment was made in 2015.

In this judgment, Ghana will not entirely halt oil productions in the equidistant boundary of dispute, but rather, the country cannot drill new wells and will continue with existing oil explorations currently held by Tullow.

Tullow is said to drill some 80,000 barrels of oil daily, and revenue from Tullows through its TEN Project is extremely vital for government, using this source to rebalance its Gross Domestic Product (GDP), on occasions.

While the compromising judgment raises our economic hopes, it also ensures that the rights claimed by our country is not compromised.

While the TEN Project is efficiently maximizing Ghana’s economic opportunities, the compromising judgment is significant in a number of ways.

Tullow is already showing bright prospects. Making sales revenue of $820 million in the first half of its operations in 2015, Tullow is growing at a faster pace and exceeding its previous annual revenues- e.g. the company recorded some $36 million profits in 2014 while making the quantum leap to $97 million in 2015, an overwhelming 169% increase.

The TEN Project which only began last year mid-2016, is said to be weathering the low oil costs as a commercial proposition because production costs are at $20 a barrel, while the oil is of high quality. The oil from the TEN Project is also said to have a lifespan of about twenty years.

And so, good signs are abundant for the economy, and the job market. The future is bright for Tullow and its TEN Project in Ghana.

Until then, we all keep fingers crossed in hope of our oil drilling successes at the TEN site, while more future wells will be warmly welcome to boost the national economic grid.