TPDC Fertilizer Plant To Provide 5000 Direct Jobs And Opportunities For Construction and Building Players

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The Tanzania Petroleum Development Corporation has announced that it will invest in a fertilizer plant to be set Kilwa division Lindi district German investors Ferostaal Industrial Project GmbH at a cost of $1.9 billion.

TPDC says it is the government’s plan to support companies investments in the extractive sector with the plant expected to produce 3850 tonnes of fertilizer daily.

According to TPDC Director for Production, Processing, Transport and delivery of natural gas  Dr. Wellington Hudson who met representatives from Kilwa, Lindi  the joint venture will utilize 104 million cubic feet daily and will produce two types of fertilizer namely ammonia and urea.

Also Read:.The Ultimate Guide To Invest In Tanzania’s oil and Gas Sector

TPDC through its managing director Dr. James Mataragio adds that the plant will provide 5000 direct jobs as well as opportunities for players in the building and construction industries who will provide the needed raw materials.

The project is also expected to increase earnings for the corporation through consumption of natural gas while at the same time provide opportunities to better sectors such as health, aviation, sea ports among others.

They were both speaking at a familiarization and community awareness tour in Kilwa that saw representatives including the area members of parliament, district commissioners and heads of various committees including security attend with the aim of ironing issues related to the project.

Since the discovery of natural gas in Tanzania the economy has witnessed tremendous growth with 70% of power generation coming from gas which is currently serving 37 industries in Dar es Sallam according to TPDC.

Tanzania And Mozambique Eye Gas Exports Despite Oil Price Slump

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Swordfish and Platform

Rivalry between Tanzania and Mozambique has sparked renewed activity in the Liquified Natural Gas (LNG) segment despite the slump in energy projects in other parts of the world.

The phenomenal drop in global oil prices has no doubt brought massive headwind for much of the energy value chain, especially exploration and production companies.

Exploration and development of reserves has fallen sharply in most parts of the world as investors stayed cautious—stirred by the fact that oil prices have fallen almost 75 percent since mid-2014 as producers pump up to two million barrels of crude every day and far in excess of demand.

Also Read:Tullow-oil-gives-kenyas-oil-and-gas-industry-150-million-development-boost

In East Africa however a budding rivalry between Tanzania and Mozambique, that have both discovered major gas reserves, has sparked renewed activity in the Liquified Natural Gas (LNG) segment despite the slump in energy projects in other parts of the world.

The two countries are in a vicious race to become Africa’s newest LNG exporter and snap up contracts before supplies from rival producers in other parts of the world come to market. Both nations have a targeted of exporting gas by early 2020s.

Tanzania’s land deal

In a move that signaled a push to expedite LNG development and exports, Tanzania on January 29 announced it had finalised a land acquisition for the site of a planned LNG plant and was now working to compensate and resettle villagers.

Oil firms have for a long time been unable to gain access to the site, dealing a blow to the country’s dream of pumping gas to the market.

“After securing the title deed, the law requires the owner to pay compensation to the relevant parties based on a valuation done by the chief government valuer,” the state-run Tanzania Petroleum Development Corporation (TPDC) said in a statement.

About 55 trillion cubic feet (tcf) of natural gas has so far been discovered in Tanzania in recent years and more is expected as exploration activities continue.

Following the deal by Tanzania, TPDC now owns title deed for some 2,071.705 hectares of land that have been set aside for the construction of the planned two-train LNG terminal at Likong’o village in the southern Tanzanian town of Lindi, which is located close to large offshore gas finds.

TPDC plans to build the onshore LNG export terminal in partnership with BG Group, Statoil, Exxonmobil and Ophir Energy.

Speeding up

The action by Tanzania came in the wake of resolutions by Mozambique and contracted firms, Anadarko and Eni, to get the natural gas projects online within the shortest time possible.

“What is critical is that we need to speed up the pace to the market because the window of opportunity might shrink,” Omar Mitha, chairman of the State owned ENH, that has a stake of at least 10 per cent in all Mozambique’s gas projects, told the Financial Times in November.

“The reason behind that is because the dynamics of the marketplace are changing” he added.

US energy company Anadarko separately said it was pushing ahead with its planned $20 billion Mozambique gas export project and will make a final investment decision once the government approves its development plan.

“”We’re working full out to achieve a final investment decision as soon as possible,” Anadarko’s country manager John Peffer told Reuters in Maputo, without committing to a timeline.

Anadarko aims to have its first LNG cargo leave Mozambique by the end of the decade, delayed from an original plan of 2018.

In the five years to 2015, Anadarko Petroleum of the US and Italy’s Eni have made gas discoveries in the Rovuma Basin in the Indian Ocean that are estimated collectively to exceed 160 tn cu ft.

Support

Both Tanzania and Mozambique are keen on tapping wealth from LNG resources to support their economies soonest possible amid tightening economic conditions.

Only recently the International Monetary Fund (IMF) approved Mozambique’s request for a $282.9 million to augment reserves and maintain macroeconomic. The loan SCF aims to alleviate the external balance of payments shocks, and through strengthening macroeconomic stability, to achieve the government’s goals on poverty reduction and inclusive.

“Despite lower commodity prices and a weaker global environment, Mozambique’s economic prospects remain positive given planned massive investment in natural resources,” the IMF said.

Tanzania is also banking on its gas reserves to help build its forex reserves through exports. East Africa’s second largest economy also hopes to save about $1billion a year in oil imports for electricity generation when it shifts to gas-fired power plants.

Tanzania in October 2015 launched a $1.33 billion project that aims to construct a 532 km natural gas pipeline to its capital Dar es Salaam from Mtwara where its gas fields are located. The project will also entail construction of gas processing plants.

Tanzania has indicated it will give priority to domestic use of its natural gas resources over exports under energy policy that will guide the exploitation of its vast reserves.

Aminex to Divest Partial Stake in Tanzanian Asset

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Silhouette of workers at oil refinery

 

Aminex plc has reached an agreement with Solo Oil plc for the divestment of a 3.825 percent interest in the Kiliwani North Development License in Tanzania for a cash consideration of $2.16 million. As part of the deal, Solo will pay Aminex $500,000 upon signing a sales and purchase agreement. The balance is payable on or before April 30 2016, unless otherwise agreed between the parties. On completion of the agreement, required in 30 days, Aminex will hold a 51.75 percent operated interest in the license and Solo will hold a 10 percent interest. The KNDL contains the Kiliwani North 1 well, which is believed to contain 2C gross contingent resources of 28 billion cubic feet of gas

Tullow Oil Gives Kenya’s Oil and Gas Industry $ 150 Million Development Boost

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A worker at the Ngamia 1 oil rig in Turkana County

                    A worker at the Ngamia 1 oil rig in Turkana County

Kenya’s oil and gas industry received a boost after explorer Tullow Oil said it would spend part of the Sh15 billion ($150 million) earmarked for the region on local development, even as the firm reported losses.

 

Tullow Oil said Kenya and Uganda would benefit from the expenditure, which includes coming up with a plan on how resources in the two countries can best be developed into sellable commodities.

“The draft Field Development Plan was submitted to the government of Kenya in December and will inform discussions as we progress towards potential Final Investment Decision (FID) of both the Kenya and Uganda upstream development projects in 2017,” said the company when it released its end of year results.

Tullow reported losses of Sh102 billion ($1 billion) after tax for 2015 which is an improvement from a loss of Sh158 billion ($1.55 billion) posted the year before.

The falling price of oil on the international market has been the biggest contributor to the loss.

Oil prices are at the $30 (Sh3,052) per barrel level, which is a 12-year low and has discouraged investment in exploring new territories.

Currently Tullow is drilling the Cheptuket-1 well in Kerio Valley which should be completed by February as it works on how best to utilise its other resources.

In August last year the Kenyan and Ugandan governments agreed that a pipeline would be best suited to transport oil from northern Uganda and Tullow said concerned ministries in both countries are working on the development plan.

“These conditions, which include ensuring that this is the lowest cost route, are being worked on by both governments in conjunction with the Kenyan and Uganda upstream parties,” said the explorer.

Last year, oil firms in Uganda led by Total hinted that they preferred a pipeline going through Tanzania to one going through northern Kenya.

Tullow’s partner Africa Oil is also optimistic that prices of the crucial commodity will improve and has been raising funds for further exploration on its northern Kenya and Ethiopia blocks.

“We are very pleased to have completed the Kenyan portion of our farm-out to Maersk. We feel Maersk will be an excellent partner in terms of technical and financial strength and experience critical to moving the development project forward.

“This transaction puts Africa Oil in the enviable position of not requiring any additional equity financing prior to first oil and will allow us to weather the current difficult oil price environment should it continue into 2016,” said Africa Oil chief executive Keith Hill after the firm completed selling part of its interest to Maersk.

Africa Oil received $427 million (Sh44 billion) from Maersk after selling its stakes on its northern Kenya and Ethiopia blocks.

Drilling of Songosongo gas well in final stages

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SongoSongo_PAT_388_p500-350x233The tedious work of drilling new offshore natural gas well at the Songosongo Island’s gas field operated by the PanAfrican Energy Tanzania (PAET) Limited, comes to an end by the beginning of next week, the operators   confirmed.

PAET’s managing director David K. Roberts made the revelations before the permanent secretary of the Ministry of Energy and Minerals, Justine Ntaliwa, who made official visit of the gigantic gas project site on the Southern Tanzanian coast last week.
Roberts who was accompanied by the firm’s operations engineer Onestus Mujemula said the work on the new well named as SS12 and related workovers for three other wells is about to conclude the offshore phase of its development programme for the Songosongo gas field.
He said the new offshore well is an addition to three others which are operating to sum up to eight in total when included with four other onshore wells located inside the precious island.
He said the new well will have the capacity of producing 35 million cubic feet of gas on daily basis to supplement others that are producing a total of 94 million cubic feet on daily basis for domestic consumers.
Robert says the gas supply  to consumers per day does not match with the  entire   capacity of the wells’ capacity that can hit in excess of 170 million cubic feet.The production is impeded by the market’s prevailing demand. So far, only 94 million cubic feet of natural gas are pumped by the PAET into the national grid connected by a pipeline from Songosongo to Dar es Salaam, to cater for power generation of TANESCO turbines and other industrial consumers.
Tanzania Petroleum Development Corporation (TPDC) is doing the marketing of the gas and other related operations to boost supply.
Also present during the latest revelations made at the sight on the tiny but priceless Songosongo Island included PAET country chairman Patrick Rutabanzibwa, commercial manager   Bizimana Ntuyabaliwe, corporate affairs officer Jacqueline Kawishe,  Andrew Kashangaki, the corporate social responsibility  manager, members of the media, TPDC officials and other ministerial officials who accompanied the permanent secretary.
The operations engineer Mujemula said the construction of the new well would ease operations particularly when other wells will be scheduled for workovers and ad hoc services, one required.
Besides the drilling of the new offshore well, PAET has also been involved in workovers of the three other wells as move towards efficient gas production.  The wells named SS-5, SS-9 and SS-7 were suspended without halting steady flow of gas for the biggest consumer of the product, TANESCO and other industrial users.
The workovers and completion of the new well by next week would ensure PAET’s pivotal role in steady production and supply of the gas.
The ministry’s permanent secretary Ntaliwa hailed PAET operational team for the latest success that has ensured consumers an availability of gas to meet their demands. He said as Tanzania gears up to meet demand of power supply which is in excess of 1,000 MEGA watts, the gas production at Songosongo will keep investors enjoy peace of mind in terms of fuel availability to run turbines as well as the projected industrial revolution.
For the past 20 years, PanAfrican Energy has played a critical role in Tanzania’s ongoing shift from costly imported fuel oil to clean domestic natural gas, as well as an important role in the development of Tanzania’s industry.  Apart from producing natural gas from the Songosongo field, which is sold by the Tanzania Petroleum Development Corporation (“TPDC”) to Songas Limited (referred to as “Protected Gas”), PanAfrican Energy develops, produces and processes “Additional Gas” and has it transported through the Songas pipeline to Dar es Salaam. The net revenues from the sale of additional gas are shared between PanAfrican Energy and TPDC under a gas Production Sharing Agreement.
In 2014, PAET marked the 10th anniversary of the commencement of Songosongo gas production.  As Tanzania’s largest producer of natural gas at present, PAET supplies the gas that generates over 35% of the electricity provided by the national grid and fuels some 38 industrial business units in Dar es Salaam.

Kiliwani North Production to Start in Mid-Feb

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Silhouette of workers at oil refinery

Africa-focused junior oil firms Aminex and Solo Oil reported Monday that the Kiliwani North-1 well in Tanzania is set to start production last this month and the well is currently undergoing final well integrity testing.

Aminex has been told by the Tanzanian Petroleum Development Corporation to get the Kiliwani North-1 well ready for production to begin in mid-February. This follows on from the partners agreeing with the authorities in January on a gas price of $3.07 per thousand cubic feet, which will be linked to the US consumer price index.

Initial production rates will be managed to allow for testing and commissioning of the recently completed Songo Songo gas processing plant and related pipelines, while also recording critically important pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the reservoir.

Aminex holds a 55.6-percent interest in the Kiliwani North Development Licence, while Solo retains a 6.2-percent holding.  Solo Chairman Neil Ritson commented in a company statement:

“Solo is delighted that the momentum of the Kiliwani North project is being maintained after the signing of the [gas sales agreement] and we anticipate being able to report first gas and receipt of first revenue in the coming months.

Read:The Ultimate Guide To Participate In Tanzanian Oil and Gas Sector

” The companies also said that a proposed agreement with Bowleven to farm out acreage in Tanzania, previously announced on Nov. 19 2015, will not now go ahead. As a consequence, Solo will retain its 25-percent stake in the Ruvuma Production Sharing Agreement, while Aminex will continue to hold its 75-percent interest.

Read Also:Reasons Why Many Tanzanians Eyieng Oil and Gas Jobs

Aminex CEO Jay Bhattacherjee commented: “The recent completion of the gas sales arrangements for the Kiliwani North field opens a new chapter for Aminex in Tanzania. With the commencement of first production from the Kiliwani North 1 well, we expect to book our first reserves in-country. The company continues to focus on appraising Ntorya where we have planned an exciting program prior to applying for a 25-year development license. Aminex is currently assessing alternative ways to monetize its gas in the Ruvuma PSA acreage, where we already have a commercial gas discovery at Ntorya-1, through an early production system. –

Bowleven walks away from $28m Tanzanian gas deal

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Edinburgh-based oil and gas explorer Bowleven has ditched plans to buy stakes in two Tanzania gas projects for up to $28 million (£19.6m).

The Africa-focused firm said in November that it had signed a conditional heads of terms with Aminex to buy a 25 per cent interest in the Kiliwani North Development Licence, which is soon to begin production, along with a 50 per cent interest in the “highly prospective” Ruvuma petroleum sharing agreement.

Also Read:The brighter Days Ahead For Tanzanian Oil and Gas Sector

At the time, Bowleven chief executive Kevin Hart said the purchase would have given the company “the opportunity to participate in highly attractive production and material appraisal/exploration assets without compromising its robust balance sheet and strong capital discipline”.

However, in a brief statement today, the Aim-quoted firm said that it had decided not to pursue its interest in the proposed acquisition of the stakes “following the completion of due diligence”.

Aminex added: “In discussions during the due diligence process, a forward work programme could not be agreed which would be acceptable to Aminex, its lender, the Tanzanian authorities and Solo Oil.”

Solo Oil has a 25 per cent interest in the Ruvuma scheme – with Aminex holding the remaining 75 per cent – and a 6.175 per cent stake in Kiliwani North, of which Aminex owns 55.575 per cent.

Bowleven last month told investors that was making good progress with an onshore development in Cameroon, where an extended flow testing programme at its Bomono permit – completed as part of plans to supply gas for a power scheme in the region – showed support for plans for an initial supply of about five to six million standard cubic feet of gas per day.

 

Uganda’s Oil Still Competitive Despite Global Oil Price Plunge

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A view of the main deck of Tullow Oil's newly completed Floating Production, Storage and Offloading vessel (FPSO) Prof. John Evans Atta Mills at Sembcorp Marine's Jurong Shipyard in Singapore January 20, 2016. REUTERS/Edgar Su

INTERVIEW

By Mark Keith Muhumuza

What have been your impressions of the Ugandan economy, so far?

Uganda has an economy that is growing fast. Uganda has one of the highest GDP growth rates in sub-Saharan Africa. I see a country that is progressing.

As far as oil sector is concerned, it is going to be a game changer for the country. All these things we talked about as developing the Ugandan economy have been without oil. The development of oil will then be a catalyst to take a major leap. It comes in addition to efforts made by government to develop infrastructure which is key to developing the resources. If you have the right infrastructure projects, it makes it easier to develop your resources. We’re impatient to get the oil out of the ground so that the country starts benefiting from the resource.

In your appointment, a statement issued by the company read that your task was “for preparing Total E&P Uganda’s operations in the Lake Albert basin during the transition from the exploration and appraisal phase to development phase.” How has this gone for you so far considering we are at the same stage of oil production as last year (the same period)?

We are discussing with the authorities and I think that they are committed to making sure that there is a lot of progress to reduce the time. The authorities are committed to reducing the delay and to facilitate the process. This is what I witnessed since I took my position. If that is done, the earlier we start the better. Discussions on field development plans are coming to a conclusion and we are confident that the production licences will be issued soon.

How soon is soon?

Soon I must say. You see, this business is a joint effort of the government and industry. I see an alignment in purpose. Both sides agree we must start production but there is a process. The government has to be convinced of what the industry is proposing. So, yes a lot of thoroughness has to go into this by the government to ensure that Ugandans benefit.

On our side, we are committed to continuing to work with the government to conclude the process. We all want to see this project start as soon as possible.

It is also important to recall we have had a major milestone in fiscal matters in July 2015 when the government granted the exemption of the VAT. This is a clear signal towards promoting the industry to invest.

Also, progress is being made on the studies concerning the route of the pipeline. All these steps are important to start the development phase.

In parallel, the government is also making efforts on infrastructure development to provide access to the Lake Albert area, which is also very important for the project.

Considering that you are managing a transition – appraisal to development -, what is your take on the waiting period for oil production licences?

The government is currently reviewing these applications. It is an interactive process which requires attention to detail considering the magnitude of the project, as well as constant communication with the Ministry of Energy to ensure that all inquiries pertaining to the Field Development Plans (FDPs) are addressed before production licences are awarded. Progress has been made and we are confident that the FDPs will be approved and production licences awarded soon.

Are you comfortable with the time it is taking for you get production licences?

In fairness, this is a process that is interactive in nature. We submitted a field development plan. The government will review it and ask questions. They will then get back to us and we’ll answer the questions. There will be a back and forth, and that is a normal process. At the end of the day, we submitted the addendum at the end of last year and they are going through it. There has to be clarity between what we put in the documents and the good understanding of the government.

Current global oil prices have meant companies have to adjust accordingly to cut costs. Uganda remains an integral part of Total’s operations and the insistence has been you are going nowhere at the moment. There is limited optimism globally around oil considering the low crude oil prices. In Uganda, this is coupled with limited activity but what keeps you going despite the fall in global oil prices and limited or no activity in the oil fields in Uganda?

As stated by our chairman and group CEO when he visited, to develop the resources in Uganda is the low-cost development. By development, I mean bringing the oil to the surface. Total remains committed to work towards producing the Ugandan oil resources as soon as possible because Uganda oil resources are potentially low-cost resources which will be competitive in the market.

Why is it competitive?

It is the cost of development. At the end of the day, it comes down to how much it costs you to produce a barrel. When you consider the resources used to produce oil in Uganda and compare to places that need deep off-shore facilities, it is not the same price. That is why it would still be competitive.

Does that then explain why you’re optimistic about the sector in Uganda because some have noted that the sector in gloomy right now?

The resources are there. Today, we are not talking about whether the resources are available. It is clear what the resources are and how to produce the resource, we know. So it is not about resource speculation. We continue to develop the oil chain in Uganda.

Total has been in Uganda for 60 years and is willing to developing its presence along the value chain in Uganda and be the partner of choice in the oil and gas sector.

Source

Despite oil glut, Tullow launches huge new deepwater production vessel

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Amid one of the deepest oil price crashes in history, Britain’s Tullow Oil (TLW.L) is sending one of the world’s biggest floating deep-water oil production platforms to West Africa to pump crude for at least 20 years.

The 340-metre long production vessel, named after late Ghanaian president Prof John Evans Atta Mills, was converted in Singapore from a Very Large Crude Carrier (VLCC) super-tanker, and is expected to set sail this weekend to Ghana, where it is scheduled to gradually ramp up production from the TEN deepwater oilfield from July/August this year, the company’s chief operating officer Paul McDade said on Thursday.

With costs (operating plus capital expenditure) of around $20 per barrel and an expected production life of 20 years or more, London-listed and Africa-focused Tullow hopes it can weather a storm which has seen crude prices LCOc1 tumble over 70 percent in 18 months to around $30 per barrel. [O/R]

Despite its low production costs, McDade said the current downturn was causing the industry huge pain, and he added that he did not expect a sharp rise in oil prices as happened in 2009 after the last crash during the global financial crisis.

“It feels more like a 1986 than a 2008. It’s a more fundamental shift. 2008 was a financial crisis, today is very different. We have oversupply, that’s structural and takes longer to adjust to,” he said, referring to low oil prices in the decade following the price crash of 1986.

Despite the outlook for excessive global output, McDade said the John Evans Atta Mills Floating Production, Storage and Offloading (FPSO) vessel was going ahead as scheduled.

“We are very much on schedule for a July/August gradual start of production. The aim is to hit peak production in early 2017,” McDade told Reuters in Singapore.

The TEN oilfield off the coast of Ghana lies at a water depth of 1,000-2,000 metres and has a maximum capacity to produce 80,000 barrels per day (bpd) of a light sweet crude quality close to Brent, and Tullow plans to operate at full production.

Tullow already produces similar grade crude from the offshore Jubilee oilfield, also in Ghana, and the company said once TEN was at full production, combined net output from West Africa would reach 100,000 bpd in early 2017.

In the midst of a huge global production overhang, with 1-2 million barrels of crude pumped every day in excess of demand, West Africa is one of the few regions that is expected to see production increases and further investment this year.

Analysts at AB Bernstein said they expected “Africa … as the most active basin in 2016”, in terms of developments and investments of potential offshore projects.

“In Ghana, we’re kind of blessed with high quality, low cost assets,” McDade said.

He said that Tullow’s overall cash operating costs were around $15 per barrel.

TAKE-OVER TARGET?

Because of the low prices, McDade said Tullow would have to be flexible with its next investment decisions, including expansion of the Jubilee field, which Bernstein estimated to see a final investment decision (FiD) in the second quarter of 2016.

The plunge in crude prices has already thrown several oil and gas projects off track. Energy consultancy Wood Mackenzie estimates projects worth $170 billion would be deferred or cancelled between 2016 and 2020, bringing the total since 2014 to $380 billion.

Barclays has said it expects global spending on exploration and production to fall by 15-20 percent this year, after already declining in 2015, noting it would be the first time spending will fall in consecutive years since 1986/87.

Tullow’s McDade said the firm would only develop its East African oil assets in Uganda if it managed to farm out a significant part of its production in order to re-invest the money made from such a sale back into those developments.

“Ideally, you’d want to invest in the current environment as services are cheap and likely to become cheaper still. In the last 8-10 years we may not have seen a better time to invest than now,” McDade said, but added this would depend on Tullow’s financial and equity position.

Tullow’s share price has fallen by around 70 percent over the last year, giving the company a market capitalization of 1.18 billion pounds ($1.68 billion).

The firm’s low share price and market capitalisation meant that Tullow was potentially a take-over target.

“As a smaller company, you’re always going to be a take-over target,” he said, but added that Tullow was not up for sale and warned any bid would also be challenging as its partnerships in Africa would entail clearances from regional governments.

(Editing by David Evans and Himani Sarkar)

Information Gap: Lesson From Ghanaian Oil Sector

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After joining the league of oil producing nations, Ghana’s uphill task was to manage the high expectation that suddenly oil discovery holds the panacea for the country problems— from unemployment to more revenue translating to huge economic gains.

The high expectations were as a result of the unavailability of information to Ghanaians and even prospective industry players on the industry.

The celebration that characterised the announcement of the discovery of oil in commercial quantities in 2007 is today making things worse as people still asked the question “where is the oil money.”

The announcement of millions of barrels oil find in 2007 flung the nation into a state of ecstasy when politicians and other state officials highlighted the economic salvation that the oil find was likely to bring.

Among them was the pronouncement of former President John Agyekum Kufuor, in his interview with the foreign press, that Ghana would become an ‘African Tiger’ and the discovery would make the country ‘fly’ by giving it the needed boost to improve its economy drastically.

President Kufuor further emphasised the monetary value of oil and stated that the money was needed to build schools, roads and hospitals.

In the run-up to the 2008 elections, the major political parties all made big promises targeted at the burgeoning petrochemical industry in the Western Region. Key promises were made regarding the creation of jobs through the establishing of petrochemical, fertiliser and liquefied petroleum gas industries.

Almost a decade

On the back of these high expectations, triggered by speculative pronouncements almost a decade after the discovery and production gave many Ghanaians a false hope.

Benchmark revenue dipped, transfers to the holding funds also dipped, which triggered the depletion of the Stabilisation Fund.

In the oil and gas sector, having all Ghanaians on the same page is essential to a highly efficient stakeholder engagement.

Though the Petroleum Revenue Management Act 815, 2011 provides that for the purposes of accountability and transparency, petroleum receipts, in whatever form, shall be published in the Gazette and at least two state own newspapers within 30 calendar days after the end of applicable quarter.

The Act went further to state that the Minister of Petroleum shall publish the total petroleum output lifted, and the reference price in the same manner online, which seems to be the perfect steps towards holistic governance principles on the part of the agent (government) towards the shareholders (people of Ghana).

If what is published per the dictates of the Act and a large number of Ghanaians are unaware of key information due to technicalities, they would be unable to see the benefits of the industry and the dynamics of price hike and its dips.

However, in upholding the rules prescribed in the Act, there seem to be what we call short-termism or the tendency to foreshorten the information horizon applied to investment decision.

The people of Ghana, who are the resource owners, are faced with the reduction in shareholders’ welfare and also incur agency cost which arise as a result of the shareholders attempt to monitor and know what is going in the industry.

Bridging the gap

Publishing of total petroleum receipts, lifting and the reference price on the website of the Ministry of Finance will be difficult to digest by majority of people of Ghana.

For all to appreciate what comes in as petroleum revenue and mode of disbursement, in accordance to Article 36 of the 1992 Constitution, there is the need for bridging the information gap.

Information about the industry needs to be brought down to level of the trader at the market who does not understand what is published on the website of the Ministry of Finance.

For instance, oil companies in Tanzania and the government translate the contents to Swahili and other dominant local languages for people to appreciate the trends.

In the condition of an ‘ideal speech’ situation, managers of the funds or revenue from the oil and gas sector must work towards a common goal.

The process should be devoid of technical presentations, and all the stakeholders should be on the same page.

The celebration of oil

It is important to note that Ghanaians are aware of the lapses in the issues of the extractive sector from the days of gold, timber, bauxite and manganese, and it is, therefore, critical to ensure education to raise consciousness to encourage mutual disclosures between government through critical and healthy debate.

That will ensure understanding, rather than mere words that will not bring transformation.

The Act is expected to provide the framework for the collection, allocation and management of the revenue in a responsible, transparent, accountable and sustainable manner for the benefit of the citizenry.

It is good that Ghana took steps ahead of many nations to put in place a Petroleum Revenue Management Act.

However, there is the need to do more to ensure an enhanced reporting system since reporting the petroleum receipts are not enough, but must go with corresponding sustainability reporting to provide stakeholders with additional information.

It is, therefore, important to ensure free flow of accurate information about the petroleum receipts and expenditure instead of allowing politicians to tell the electorate the embellished truth skewed for political