We Must Not Allow Ghana To Be Shortchanged In Selling Its Oil!

When it was announced on the 6th of December 2010, that Vitol had been appointed exclusive marketer of Tullow Oil’s share of the Jubilee fields oil production, the Vitol Group’s president and chief executive, Ian Taylor, was quoted as saying: “We are very pleased to have been awarded this contract to market Tullow’s share. Our global network, knowledge of the West African crude oil market and close relationships with the refining sector gives us a strong base from which to market this crude and maximise its value”.

Little wonder then, that many ordinary Ghanaians are asking, why, when the price of oil on the international market is certainly above US$67 per barrel, this giant energy trading company (which together with Glencore and Trafigura are the biggest three in the world), is said to have sold Tullow Oil’s oil at US$67 per barrel (if Ghanaian media reports are to be believed, that is!).

For such Ghanaians, the question simply is: if Ian Taylor said his company would “maximize” Tullow Oils’s jubilee light sweet crude’s “value”, why did the Vitol Group not look for oil elsewhere, in its vast network of suppliers and extensive storage facilities worldwide, for oil to meet its contractual obligations to third parties (which it had agreed to sell oil at US$67 per barrel for), if that is why the oil was sold at that price?

Or is it the case that Tullow Oil had hedged its share of the jubilee fields’ oil at that price – and the Vitol Group was only delivering to the party concerned on Tullow Oil’s behalf?

On the other hand, one wonders whether we are to believe the conspiracy theorists in our midst, who say that it is a classic example of the usual get-rich-quick tricks of the clever-folk-in-high-places, who never fail to seize every opportunity that comes their way, to rip Mother Ghana off - cleverly calculating that since the government had based its expected oil revenues from the jubilee fields on the US$67 per barrel figure, ordinary folk would assume that that was the price it was to be sold for: and accept the situation quietly and meekly?

Either way, dear reader, surely, the good people of Ghana need to be told why, when their government has to buy oil at the prevailing market rates (after the expiry of its own oil hedging contracts!), for the Tema Oil Refinery (TOR) to produce fuel for motorists and other fuel users in Ghana, jubilee light sweet crude, which is of such quality that it is said to be of a grade highly sought after by refineries as far apart as North America and Asia, should be allowed to be sold for anything less than prevailing market rates on the spot markets for oil, so that any windfall profits will be taxed appropriately to yield maximum value, for funding development projects in Ghana?

Those who are in charge of the energy sector must understand clearly that Ghanaians will not tolerate Kweku-Ananse-accounting in the oil and natural gas industries of Nkrumah's Ghana – so that politically well-connected individuals can end up becoming super-rich from such smoke-and-mirrors shenanigans: at the expense of the rest of Ghanaians and their homeland Ghana.

As it is, many Ghanaians are already very upset that the president did not order the arrest of the foreign oil company chief who attempted to bribe him – but chose instead to complain about that insult to US Embassy officials here.

Did it not strike President Mills that he would have made history if that had happened? Did it not occur to him that he would have been impossible to beat in the 2012 presidential elections if that had happened?

Would it not have been headline news on every radio and TV station on the planet Earth had that happened - and would he not have been immortalised by that singular act?

He may very well come to rue the day he allowed that insolent and corrupt individual to walk free from his office - as his oil company will fund the opposition New Patriotic Party's (NPP) election campaign in 2012, through backdoor channels: as sure as day follows night.

Then there is the foolish and irresponsible decision by some of his appointees to let Kosmos Oil get away scot-free after initially being fined for spilling toxic material into the Atlantic Ocean – in exchange for helping the Environmental Protection Agency (EPA) “build capacity”. God give us patience.

Have you heard of anything more cynical and asinine, dear reader? The EPA has some of the best scientific minds in the world, amongst those it employs. What it needs is cash not Kosmos Oil's 'capacity-building' – and can you imagine what the US$17 millions or so that Kosmos Oil was reported to have been fined (although yours truly has no idea what the actual figure was – since the mostly-spineless individuals who run our nation chose to keep it secret!), could have done for the EPA; resource-wise?

In any case, is that how the U.S. administration dealt with BP during the Gulf of Mexico spillage disaster? Or are Ghanaian lives and the economies of our coastal communities not worth giving similar protection to, from reckless, arrogant and disrespectful oil companies?

Perhaps, if need be, Parliament must quickly pass a law, which will insist that when Ghana’s jubilee light sweet crude is sold below the prevailing spot market price for oil, the government will tax the company concerned, as if its share of the Jubilee field oil had been sold at the spot market price for oil, on the day that oil was sold.

We must definitely not allow our nation to be shortchanged when it comes to selling its oil – as Ghanaians want the revenues to be used to help transform their nation into an African equivalent of the egalitarian societies of Scandinavia.

The question is: Are those mostly-hard-of-hearing individuals currently in charge of our nation listening? One certainly hopes they are. Ghana's educated elite must not attempt to copy Nigeria's kleptocratic elite's stewardship of that nation's oil and natural gas revenues - for opaque transactions in Ghana's oil and natural gas industry could lead to social unrest. Ghana will not be immune to a Hugo Chavez-style revolution, in such circumstances. A word to the wise... Hmmm, Ghana - eyeasem oo: asem ebeba debi ankasa!

Tel: (powered by Tigo – the one mobile phone network in Ghana that actually works!): + 233 (0) 27 745 3109.