Ghana’s president John Mahama officially opened the valves Thursday at the country’s second offshore field. But there is noticeably less buzz about the project than when Ghana first entered commercial oil production in 2010.
Ghana’s entry into oil production in 2010 was met with huge expectations. Ghana was one of the world’s fastest-growing economies.
But the West African nation’s fortunes have been dwindling. Inflation is high. Public debt is soaring. Severe power shortages have crippled the economy over the past four years.
Even though oil revenues have exceeded the $2 billion target, Ghana has spent more importing fuel than it made exporting crude, according to December 2015 statistics.
In the western oil-producing region, residents say they have not seen much benefit.
Gideon Jimah sells safety gear and power tools in Takoradi.
“Not all are benefiting since the industry requires skilled laborers. … Most of the workers are expatriates and indirectly we can see a little impact in the city like new roads around market circle,” he said.
As the country now expands oil production in Takoradi, many have doubts about its prospects. The new project is referred to by the acronym TEN, which stands for Tweneboa, Enyenra and Ntomme. It is expected to produce about 23,000 barrels a day this year.
Possible job creation
Minister of Petroleum, Emmanuel Buah, told VOA it will create jobs.
“If you look at the TEN itself, in terms of people who can be on board, I think 120. I think 120 crew at every particular time and they ran in shifts. And then you can look at the service companies who are going to be working in different capacities and so it adds to the numbers,” he said. “The Petroleum Commission has already estimated that currently we have almost over 7,000 employees in the upstream sector, over 5,500 of them being Ghanaians.”
The global price of oil has fallen drastically since 2014.
Last year, Tullow Ghana said it was forced to lay off workers. The Ghana Transport, Petroleum and Chemical Workers Union said about 300 local employees were laid off.
Concern of FPSO use
One concern with this new project is the use of FPSOs, which stands for Floating Production, Storage and Offloading. It is essentially a vessel used at offshore oil installations. Problems on the Kwame Nkrumah FPSO at the Jubilee field halted production for almost two months this year.
The government says the issue has been resolved.
“As we speak now the FPSO Jubilee is producing at full capacity. I think that we’ve done a lot to ensure that FPSO Atta Mills will not face the challenges that we’ve seen with Jubilee,” Buah said.
Kofi Bentil is vice president of the policy think tank IMANI Ghana. He says it remains to be seen whether the government has learned from its mistakes.
“In the paper we wrote in 2009, we made a number of proposals. One of the proposals we made was that we should try and sequester oil revenues, put them aside,” he said. “And we suggested that in order to be able to show clearly the difference it is making, we should commit all oil revenues to infrastructure development so you can point to that road and say this was built from oil.”
He said corruption and mismanagement have eaten into oil revenues.