The Ghana National Petroleum Corporation (GNPC) has urged West African countries to focus on economic diversification, which will ensure real growth in other non-oil sectors.
Mr Alexander Kofi-Mensah Mould, acting Chief Executive, GNPC, observed that most oil provinces in Africa experience a migration of skilled labour and talent to the oil sector, away from other productive sectors.
Mr Mould made these remarks in Accra on Tuesday, during the opening ceremony of the first ECOWAS Mining and Petroleum Forum and Exhibition (ECOMOF).
The two-day conference, which was opened on behalf of President John Dramani Mahama, by Nii Osa Mills, Minister for Lands and Natural Resources; is being organised by the ECOWAS Commission, in collaboration with the GNPC and AME Trade Ltd.
ECOMOF 2015 on the theme “Valourising West Africa’s Mineral and Petroleum Resource through Regional Cooperation” is West Africa’s only institutionally backed regional mining and petroleum forum, which aims at uniting West Africa’s public and private sector decision makers from both mining and petroleum industries, in one place and at one time.
Mr Mould said governments tend to concentrate more on the energy sector in a bid to “maximise revenue,” stating that “appreciation of the local currency leads to a reduction in export competitiveness of non-oil sectors.
Citing from BP, 2014 Statistical Review of World Energy, June 2015 Report, he said Africa was endowed with a huge natural gas resource base and that the continent boasted of proved gas reserves of an estimated 7.6 trillion cubic metres in 2014.
He said the “oil curse” known as the “Dutch Disease” in Africa could lead to the overheating of economy, when absorptive capacity limit of the economy is breached; adding that the oil curse tends to widen income gap between the rich and the poor.
Mr Mould said some African countries such as Ghana were championing efforts designed to address the historical oil curse and avert emerging threats by putting in place clear separation of commercial activities from developmental priorities of national oil companies.
He said Ghana’s establishment of the Petroleum Revenue Management Act and the Petroleum Commission Act, operating within the Ghana Extractive Industry Transparency Initiative (GHEITI) governance framework and the Exploration and Production (E & P) Bill review are examples of such efforts.
Mr Mould noted that the socio-economic impact of oil include strong linkages to auxiliary industries such as real estate, ICT, and hospitality industries.
He said there was also heightened civil society awareness in demand for sector transparency and accountability, adding that side-lining of indigenous communities could present unwelcome local tensions such as the Niger Delta experience.
Mr Mould mentioned that the benefits of a well-managed resource system included increased local content participation, national training and employment opportunities.
He said the extractive industry problems were common in the sub-region; adding that the solutions were more effective with strategic collaborations among the various key players such as regulators, national oil companies, policymakers, private companies and local communities.
Mr Mould said examples of arrangements where such regional collaborations came into play include; the West African Gas pipeline, the West Africa Power Pool, the case of Ghana versus the Ivory Coast concerning petroleum resources that straddle regional basins; and negotiation with WAGP on the pipeline tariff.
He said the case of Ghana’s Sankofa Gas Project (OCTP Project) required strong collaborative efforts from the state, partners and stakeholders alike to ensure a successful deal.
Mr Mould noted that the commercial structuring of the OCTP project made it one of the most complex of its kind worldwide on the global hydrocarbon industry. The project heralds the development of Ghana’s gas market, with the potential to evolve into a regional hub.
According to him, the project was worth an estimated $7.90 billion; and first oil was expected in August 2017, with first gas coming on-stream in February 2018.
Mr Mould observed that the project could supply 180 mmscfd to power plants for over 13 years; and beyond peak supply, field would still produce gas at declining rates for the remainder of the 18-year license.
Mr Kadré Désiré Ouédraogo, ECOWAS Commission President, said the Commission would continue to be guided by its core operative principles that border on cooperation, harmonization and integration.
“We will continue to make concrete proposals that will enable the ECOWAS Authority of Heads of State and Government and the Council of Ministers to take decisions on the main orientations of policies of Member States and the Community,” he said.
Source: Ghana News Agency (https://www.ghanabusinessnews.com/2015/10/08/gnpc-urges-west-african-countries-to-focus-on-economic-diversification/)