Thursday, June 30, 2011

For Once A Legitimate Ghanaian Oil Company Success Story

After the recent announcement by Tullow oil about its agreement with EO Group, the only Ghanaian partners in the Jubilee oil field, Ghanaians are re-thinking the notion that the NDC Party is anti-business and bitterly vindictive of businessmen who are perceived to be aligned with their opposition parties.

The Mills administration, therefore, has a unique opportunity to not only win hearts within the business community by granting the needed consent of this transaction, but to also score valuable points in the area of political harmony that Ghanaians cherish.

The transaction which is still subject to government’s approval is going to be the first of its kind and will vindicate the Ghanaian authorities about the false impression created by some as only being interested in the Chinese companies to invest in oil and gas assets in Ghana.

Furthermore, it would render credible President Mills’ recent call on Ghanaian indigenes to participate in the emerging oil and gas industry. Thus a government approval of this transaction should attract the praise that it deserves.

Tullow Oil which is the operator of the Jubilee field also deserves recognition for taking unprecedented steps towards sharing its investment gains with Ghanaians by listing on the Ghana Stock Exchange and making the commitment to invest more in Ghana through the acquisition of EO Group’s interest.

Is clearly a positive indication of a company which has a long-term interest in the community within which it operates and demonstration of profound corporate responsibility, a culture that is in scarce supply among the International Oil Companies operating in Africa.

Once the government has shown its sincerity, and Tullow Oil has shown its commitment to developing Ghanaian participation, it would be the turn of EO Group to set a worthy example by re-investing some of its dividend in the Ghana economy.

As the first Ghanaian major private stakeholder in the Jubilee Field, they have both the moral and business responsibilities to give back to the community. All told, experts estimate EO Group’s returns to be about $75- million dollars after paying expenses, liabilities and applicable taxes.

To this end, it would be prudent on the part of the government to encourage them to re-invest a significant portion back into the Ghanaian economy. For a country known to go around the world with hat in hand, it would be a shame if this amount of local capital ends up in foreign banks.

Although, we have been reliably informed about EO Group’s intentions to re-invest in the community as part of their long held belief boosting corporate Ghana the government would still have to make sure they are encouraged to do so much in the same manner it encourages foreigners to invest in our country.

If investments mean jobs, and Ghanaians need jobs, the government and the EO Group should both be looking at investing that level of capital locally.

Some of the areas the EO Group is said to be interested in investing some of its returns are in the Science and Technology fields. The EO Group foresees significant Ghanaian equity ownership and skilled participation in businesses springing off from our emerging oil and gas industry.

They are also said to be interested in making substantial investment in the health care sector, an area that one of the partner’s already has a long history of helping the community particularly in the rural areas.

In spite of all the misinformation that has been peddled in the past about the EO Group, theirs is indeed a real life success story, and all Ghanaians should be encouraged by this recent development involving Tullow Oil and the Ghana government to get involved not only in oil and gas but all of the other sectors of the economy yet to get off the ground.

Consequently, this recent attempt by some in the government to cause commercial damage not only to the EO Group but to the rest of the nation by pursuing a very weak, old, and rehashed legal case is not in the interest of our country. Cooler heads must prevail to readjust the government’s stance on this issue.

By Ghana Oil Watchdog Chairman ,Mumuni Adams Fusseni Cincinnati Ohio - USA

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