Monday 25 February 2008

Ghana’s sudden influx of oil wealth

West Africa’s second giant Ghana’s dream of joining the ranks of Africa’s oil exporters came a step closer to reality when Tullow Oil discovered perhaps  1.2bn barrels of crude last year.

But the coups, conflict and corruption plaguing the continent’s other producers are a reminder of the risks that a sudden influx of riches can bring.

Regarded as among the more stable and democratic countries in West Africa, Ghana says it will learn from the mistakes of its peers to harness oil for the benefit of all.

“There’s no reason that oil should be a curse,” says one Ghana government official. “We want to make sure we follow the example of countries like Canada or Norway who’ve used oil to their benefit.”

So far though, the dominant theme is one of uncertainty. Nobody knows quite how much oil lies off the palm fringed coast, or precisely how the government will manage the income when crude starts flowing in. Ghana has sought to exploit its energy potential for decades, but it was only last year that the Mahogany and Hyedua wells turned the country into one of the most talked about exploration zones in Africa.

“This is a world-class discovery,” says Angus McCoss, exploration director at Tullow Oil. “Certainly the potential’s there to move Ghana forward into the top tier in terms of new oil and new plays.”

Tullow says it has found a reserve of between 170m and 1.38bn  recoverable barrels extending across the West Cape, Three Points and Deepwater Tano blocks. Combined with promising exploration work in Uganda, the Ghana prospect could be an important discovery for the UK-listed Tullow, which is working in Ghana with Kosmos Energy and Anadarko Petroleum Corp.

For Ghana, the implications could be even bigger. Keen to reap rewards from high oil prices, the government wants production to start in 2009, although Tullow’s field may not come onstream until 2011.

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