Around 1471, Portuguese explorers arriving at the West African coast found so much gold between the Ankobra and Volta Rivers, they called the area La Mina, The Mine. La Mina was later corrupted to the grammatically impossible “Elmina”, as in Elmina Castle, which the Portuguese built between 1482 and 1486 in order to trade in gold, ivory and of course, slaves. Volta is also Portuguese, meaning “return” (somewhat similar to Spanish vuelta), in reference to the farthest the explorers got traveling inland up the river before turning back. The Gold Coast was the name the English gave to what became Ghana at the nation's independence in March 1957, named after the ancient kingdom of Ghana, which was far inland and northwest of the present nation on the coast. “Ghana,” which means warrior kings, was really the name given not to the ancient kingdom, but to its rulers. The kingdom itself was ancient Wagadugu (Ouagadougou), which is now the name of the capital of Burkina Faso, formerly known as Upper Volta. Confused yet? Good. You're normal.
After the Portuguese landed, news of all this gold and stuff spread like wildfire even without the Internet, and not to be outdone, a whole bunch of Europeans jumped on the bandwagon and made tracks to this glittering place on the West African coast called La Mina – the Dutch, British, Brandenburg-Prussians (Seriously? Prussians?) Danes and Swedes. Following the lead of the Portuguese and each other, they all built forts and castles – more about that in an upcoming blog.
So some five centuries later, Ghana has a new gold in town of a different color and texture: “black gold,” or more correctly, petroleum or crude oil. At this point, human beings apparently can't do without this substance to develop and maintain their standards of living. We think of oil products in terms of the gasoline (petrol)that our cars use, but look at this long list of items that directly or indirectly derive from petroleum
- Diesel fuel
- Heating oil
- Jet fuel
- Bunker fuel
- Synthetic rubber
- Synthetic fibers
- Photographic film
- Food additives (canned food)
- Synthetic fibers (such as polyester, nylon, acrylic)
Is there any wonder that whenever new oil is struck, people go crazy? In 2007, UK firm Tullow Oil announced the discovery of light crude oil in the Mahogany exploration well off Ghana's shore. Oil exploration itself in Ghana is nothing new. It dates back as far as the 19th century with the West African Oil and Fuel Company. See a history of this here. But in modern times, Tullow Oil with CEO Aidan Heavey at the helm, and Kosmos Energy its partner, earn the credit for drilling for and acquisition of crude oil in Ghana. The Jubilee Field, as it was named, holds billions of barrels of light, sweet oil, a highly sought-after grade of crude. With blinding speed, Tullow made progress to first oil between 2007 and mid-December 2010, which is quick by any standards. To get an idea of the scale of the operation, you should really read this account.
“Jackpot” would be a tame word for what Tullow had. The Jubilee Field kept growing, and with it, a frenzy of excited people scrambling on board this rapid-moving train. Remember the Portuguese and La Mina? Same kind of thing, except that things move much faster nowadays.
The two main cities in the vicinity of Jubilee Field are Takoradi and Axim, but the 25,000 population of the latter is one-thirteenth that of the former, and Axim has no harbor the way Takoradi does. So the star city, the “oil city,” the focus of this petroleum boom is Takoradi, hands down. Tullow has the largest stake in Jubilee field, but it isn't doing this alone. By 2010 end, the breakdown of the “unit interests” was as follows:
Tullow Ghana Limited 36.45%: Unit operator of the Jubilee Phase 1 development, i.e. the oil company in charge of development and production in an oilfield in which several companies have joined to produce the field.
Kosmos Energy Ghana 23.49%: US exploration company. Technical operator of the Jubilee Phase 1 project, technically the company that actually drilled for and “hit” the petroleum.
Anadarko WCTP Company 23.49%: Large US independent exploration and production company with proven deepwater project capabilities.
Sabre Oil & Gas Limited 2.81%: Privately owned exploration company
But Jubilee Field is, like La Mina was, only the beginning, not the end. Like the Dutch, Danes, Swedes and the Brits who followed the Portuguese, other oil exploratory companies and firms in a supportive role are following Tullow's trailblazing lead. Off Takoradi's Axim Road on an expanse of land that I can only call a “business estate”near the Airforce Base, several companies have set up shop.
Besides the four named above, here are some of the names in the panoply of companies in Takoradi in connection with the petroleum industry (E&P = Exploration and production)
- Baker Hughes – American, provides oilfield resources, products and services for drilling companies
- Chevron Corporation – American, E&P
- Cirrus Oil – Ghanaian, trading, storage and distribution
- Eni – Italian, E&P
- Ghana National Petroleum Company – state agency for promotion of E&P, licensing, distribution
- Hess Corporation – American, E&P
- LUKoil – Russian, E&P
- Maersk Oil – Danish, I believe, E&P
- MODEC – engineering, procurement, construction and installation of floating production systems
- Ocean Rig – owns Eric Raude, a semi-submersible drilling rig used by Tullow
- Schlumberger – provides oilfield resources, products and services for drilling companies, a competitor of Baker Hughes above
- Stellar – British, supportive to the oil companies
- Vanco – E&P
Of course, this isn't supposed to be a one-way street in which only the multinationals gain from the substantial oil reserves Ghana has. In the long term, Ghana may make an estimated $1 billion and more a year. There are still many questions and concerns about corruption and how the nation manages this revenue, tersely summarized as, “Norway, or Nigeria?”
On the face of it, foreign investment in Ghana is a good thing. There are some healthy predictions for Ghana's GDP growth rate in the next couple years, some rather staggering, and others more sober. I'm no economist, but I suspect the more outlandish figures are not inflation-adjusted.
Something – actually, a number of things – about Ghana make it very attractive for its oil-prospecting visitors. To a person, these oil personnel from all over the world will tell you that Ghana is far advanced in many ways compared to other African countries they have visited. Additionally, the peace, safety, and political stability of this country are a huge draw. By contrast in Nigeria, oil executives reportedly travel around with armed guards and in bulletproof vehicles. Ghanaians, a resourceful and innovative people for whom even apparently insurmountable obstacles may be declared “no problem,” are remarkably open to doing business with outsiders, whom they happily welcome.
However that characteristic can be its own danger. With the second coming to Ghana's shores of people hungry for a particularly valuable natural resource, the host nation must exercise care and caution. Human nature being what it is, altruism is not the basis of the frenetic hunt for oil today, just as it wasn't in the quest for glittering gold by the 15th-century Portuguese and the rest of the bunch.