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Monday, July 12, 2010

GHANA: First Oil Now Expected November

Mr John Mahama - Ghana's Vice-President
Mr John Mahama - Ghana's Vice-President
The first bulk of 120,000 barrels of oil to be pumped out of Ghana’s Jubilee Field in the Western Region is now expected in November this year, instead of December, as earlier envisaged.

In readiness for that breakthrough, the Vice-President, Mr John Dramani Mahama, has assured the international community that the country has taken the necessary steps to prepare itself to become an oil economy.

Speaking at a Chatham House briefing in London, the Vice-President said, "Schedules for oil production are well ahead; oil has the potential to be very much transformational for our economy."

He said the government had done extensive consultation with a number of oil-producing countries, including the UK and Norway, in addition to Nigeria and Gabon, to understand their experiences and help prepare the appropriate legal and fiscal framework.

Meanwhile, the Wall Street Journal reports that talks between the Ghanaian government and the US oil company, Kosmos Energy LLC, are ongoing over the sale of the company's stake in the Jubilee Field.

The government blocked an estimated $4 billion sale of Kosmos’s stake in Jubilee, following months of talks between potential buyer Exxon Mobil Corp (XOM) and Kosmos.

The government has accused Kosmos of cutting Ghana's state-run oil company out of discussions over the field's development and then sharing information on the field with more than 20 potential buyers without the government's permission.

A souce familiar with Kosmos's position said Kosmos had opened the data room, in contravention of the rules previously agreed on with the Ghanaian government.

He quoted the Energy Minister, Joe Oteng-Adjei, as saying that the Ghana National Petroleum Corporation (GNPC) would be the only entity allowed to buy the Kosmos stake in Jubilee.

Mr Oteng-Adjei had already suggested that the GNPC would be willing to pay a fair price for the Kosmos stake.

The Vice-President also interacted with the staff and management of the Ghana International Bank (GIB) on its premises on the fringes of the Ghana-UK Investment Forum 2010 in London.

He said the government, determined to make good use of the country's oil discovery for the benefit of the people, had put in place checks and balances to build a resilient and robust economy.

He hinted that the bank would play a very critical role when business commenced, adding, “We should be able to channel a lot of businesses through the bank.”

He said the bank would be used as a vessel to promote President Mills's better Ghana agenda and that the government would continue to work towards making Ghana the preferred investment destination in the sub-region and the world at large.

The Vice-President told the management and staff of the bank that the economic situation in 2009 had not been the best because of the global economic meltdown but 2010 could be better, judging from this year’s budget, which was more expansive.

He said the 5.7 per cent growth estimated by the government would be achieved and cited the drop in inflation, the stabilisation of the cedi and the recovery of the value of the cedi as some of the indicators of the good management of the country.

”We want to assure you that we are on track and there are indications of strong investment and business confidence,” he said.
“What the country needs to do now is encourage small and medium-scale enterprises (SMEs) to enable them to contribute to the growth of the economy,” he added.

The Managing Director and Chief Executive Officer of the bank, Mr Joe Mensah, said a survey carried out in London showed that out of the 156 banks there, the GIB placed 24th on return assets and 27th on return capital.

He gave the assurance that resources mobilised in Ghana as a result of the oil find would be ploughed back to Africa, noting that “we have not finished developing Africa yet”.

On support to the Ghanaian community in London, Mr Mensah said the GIB had supported a number of Ghanaians to open bank accounts and also introduced them to credit cards with which they could assess banking anywhere in the world.

He announced plans by the bank to double its capital from £50 million to £100 million, saying, “We want to be part of Ghana's developmental agenda.”

He said the bank raised £1.2 billion last year for cocoa purchases as part of moves to raise funds for a Ghanaian entity. 
Source: Daily Graphic

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