INTERNATIONAL POLICY CONFERENCE “COMPETITIVENESS & DIVERSIFICATION: STRATEGIC CHALLENGES IN A PETROLEUM-RICH ECONOMY

1. INTERNATIONAL POLICY CONFERENCE “COMPETITIVENESS & DIVERSIFICATION: STRATEGIC CHALLENGES INA PETROLEUM-RICH ECONOMY” Strategic Resources and Their Management: The Oil Find in Ghana Joe Asamoah 14 – 15 march 2011, Accra, Ghana

2. INTERNATIONAL POLICY CONEFERENCE - COMPETITIVENESS & DIVERSIFICATION Strategic Resources and Their Management: The Oil Find in Ghana Joe Asamoah, Ph.D MD, EnerWise Africa 14-15 MARCH 2011, ACCRA, GHANA

3. Outline • Strategic Resources • Management • Oil Resources in Ghana • Paradox of Plenty • Pertinent Questions • The Manager’s of Corporate Ghana • Manifestations of the Oil Curse • Ghana’s Performance Vis-à-Vis Resource Curse • Lack of Preparedness for the Oil Curse • Optimising Benefits from Oil • Recommendations

4. Strategic Resources (1) • What are strategic resources? <> Resources that are used to create value for customers and shareholders – oil, minerals, etc. • Are strategic resources not easy to manage? <> The problem does not lie with the resources, but their management

5. Management • What is Management? <> The art of using people to get things done, <> Managers attain organisational goals not by performing tasks themselves, but <>By arranging others to perform the necessary tasks.

6. Quality of Management • There is mismanagement of natural resources in sub-Saharan Africa. • Are we poor managers, or are we ‘jinxed?’  <> We are not jinxed <> We are poor managers <> Project management is taken for granted

7. The Oil Resources • What are the Oil Resources? <> The Jubilee Field (The Flagship) <> Other Fields - Dzata - Enyenra - Tweneboah - Sankofa, etc., • How does Ghana Prevent the Oil-Curse? - Million Dollar-Question

8. The Jubilee and Other Fields

9. Million-dollar Question • Will oil achieve more socio-economic development for Ghana than other natural resources exploited and being exploited in commercial quantities?

10. The Paradox of Plenty • Have Ghanaians thought about the “paradox of plenty” or the “resource-curse?”

11. Pertinent Question • Are Government, research & academia, etc., addressing the paradox of plenty? <> Dearth of intellectual posture <> Cannot be wished away

12. The Managers of “Corporate” Ghana (1) • Who are the managers of our resources?   <> The managers are in a Continuum <> The managers play various roles in Corporate Ghana - likened to the usual Corporate entity

13. The Managers of “Corporate” Ghana (2) • Sectional leaders, • Heads of departments, • General managers, • Chief operating officers, • Chief executive officers,

14. The Managers of “Corporate” Ghana (3) • The Directors and Chief Directors of the relevant, Government Departments, • The Ministers, • The Chief of Staff, and the • The State President

15. Optimizing Benefits from Oil • Who is to ensure that those in the value chain are on the ball? <> All Ghanaians • How does Ghana Mitigate the Dutch Disease? <> Form a Think Tank <> Take a Cue – Norway, T&T, etc/Late entrant advantage

16. Manifestations of The Oil Curse (1) • Security of democracy challenges • The nexus of oil abundance and violent conflicts • Environmental degradation • The institutionalisation of authoritarian rule

17. Manifestations of the Oil Curse (2) • Fiscal indiscipline • Collaterisation of future oil revenues • Corruption

18. Ghana’s Performance Vis-à-Vis the Resource Curse Challenge (1) • Ghana is fairly democratic • Successful conduct of relatively free, fair and transparent elections from 1992 to date • Endorsement of Ghana’s democratic credentials - confirmation by President Obama’s choice for his historic speech to Africa for “institutional development and democratic development”

19. Ghana’s Performance Vis-à-Vis the Resource Curse Challenge (2) • Too early to establish nexus of oil abundance and violence in Ghana, • Formation of the Petroleum Security and Co-ordinating Committee – for the protection of the country’s oil and gas fields against terrorist attacks, sabotage and environmental pollution • Corruption is a problem

20. The Eirik Raude Drilling Unit

21. Lack of Preparedness for the Oil Curse • Preparedness of Ghana in putting in place legislation on exploration and production is questionable. • The bill passed by parliament is silent on gas flaring, • Dearth of measures to avert oil spills and the mechanism to deal with them. • Ghana has problems with fiscal discipline. 

22. FPSO Kwame Nkrumah Delivery of First Oil from the Jubilee field in Ghana represented 3.5 years of rigorous work by the Government and the Jubilee partners

23. CAVEAT! • Ghana is a relatively good house in a poor neighbourhood • However, this must not be not cause for hubris

24. Potential Threats and Action • Potential encroachment of the immediate areas of any rig / installation by fishermen and “illicit” bunkering teams <> Strengthening of the Petroleum Revenue Management Bill <> Beefing up the capability of the Navy / Petroleum Security & Co-ordinating Committee to deal with any threats <> Proper investigation into alleged plans by foreign teams to loot Ghana’s oil

25. Recommendations (1) • On the institutional level, Ghana needs to immediately set up a “Think Tank” on Oil and Gas – prognosis, modelling and mitigation of the systemic challenge - the “Dutch Disease”  • Publish what she receives from the International Oil Companies

26. Recommendations (2) • Beef up the capacity of the GNPC to properly manage the hydrocarbon resources of Ghana <> Enhance the Technical Manpower <> Make all oil and gas operations and agreements transparent and public • Consider setting up a new Ministry of Petroleum • Fix the infrastructure in the country

27. The End Thank You Merci Beaucoup