Ghana’s now famous Jubilee Field has been appraised as holding upward of 1.8 billion Barrels of recoverable oil, a giant field by all standards. And a 24-hour test-flow conducted a couple of months ago has led to the upward revision of expected initial production flow, from 60,000 barrels per day (bpd) to 120,000 bpd, with actual production expected to commence at latest by the first quarter of 2010.

This immediately makes Ghana an important player in the West African Gulf of Guinea which, incidentally, is increasingly becoming a strategically important source of oil supply to the United States as Washington seeks to reduce its dependence on Middle East resources.

But a desperate Europe, also seeking to diversify its supply sources so as to reduce its dangerous overdependence on an increasingly assertive Russia, as well as China - with its insatiable appetite for oil - are all intensifying their own activities in the Gulf of Guinea. The region is being set to become the stage for western rivalries with the People's Republic of China.

It is into these stormy waters that Ghana has been plunged, even without having yet pumped its first barrel of oil.

Contest for the Gulf

In early September, Germany - the country singularly supercharging Europe - invited Ghana's President Kufuor and awarded him with Germany's highest state honour: "Bundesverstkreuz". Kufuor returned with deals for German firms to invest massively in Ghana's all but non-existent rail transport sector.

Instructively, the following week, Monday September 8, German chiefs of mission from all over the world began their annual ambassadors' conference to discuss the "Natural resources in Africa" and the continent's "interwoven global interests".

In attendance was Kofi Annan, former UN Secretary General from Ghana; Jean Ping, Chair of the Commission of the African Union; and Kermit Davis, Administrator of the United Nations Development Programme (UNDP).

The focus of the conference was how to address Germany's loss of ground to China in the scramble for Africa's raw materials.

Chinese-African trade has grown beyond all expectations. By the first half of 2008, the trade volume had reached US$53.14 billion (37.25 billion euros), representing a 40 percent rise compared to the same period of 2007. This growth rate, if continued, would increase trade volume to more than US$100 billion by year's end - a target that had been predicted for 2010 at the earliest. This makes Chinese-African trade double that of German-African trade, which stood at 33.3 billion euros, last year.

Berlin's previous measures, having been proven to be ineffective, are now being replaced by intensified activities in the Gulf - demanding a share and harassing Beijing. Berlin has in recent times increased the number of its uniformed officers in Accra, at the Kofi Annan International Peacekeeping Training Centre (KAIPTC), serving as advisers and trainers. This institution seeks to promote West Africa's - and Germany's - policies on political (and economic) development of the continent.

But the U.S. will not be outmaneuvered. Just a week after Berlin's renewed overtures to Accra, President Bush invited Kufuor over to Washington and rolled out the red carpet for him. And as expected, he did not return empty-handed. He had more than US$300 million tucked under his belt for projects aimed at rural development. But that was not before the two had held closed door bilateral discussions. You can bet oil and security matters were the prominent if not primary focus of the talks.

Washington has made no secret of its intentions to source a large proportion of US future oil and gas needs - up to 25 percent - from the Gulf of Guinea. Already, Angola, which produces over 1.7 billion bpd, is ranked sixth among Washington's oil suppliers. Washington considers Luanda as Important to US interests - not only for its immense resource deposits, but also because since the end of the civil war specialists have seen it as aspiring to attain political hegemony in South West Africa.

Incidentally, Ghana also is being increasingly viewed in that light by the West; playing a similar role in the Gulf, more especially as it consistently demonstrates the capability to sustain a stable democracy. This is against the backdrop of a Nigeria faltering over its Delta region crisis which has led to a reduction in Nigeria’s 2.1 million bpd oil output by about a third.

To better appreciate the growing strategic importance of Accra, one needs to grasp the extent of Ghana's potential as a major oil producing nation on a continent that has recorded a 15 percent increase in its confirmed oil and natural gas reserves over the past decade, whereas the world average remains at eight percent - and with the African nations far from exhausting their exploration.

Zero to billion

	Rivalries can be expected in Ghana, where all the world powers are establishing a stake in the country's resources

Until the Jubilee Field discovery, Ghana had an estimated reserve of 15 million barrels (bbl) and was producing about 600 bpd. The find currently positions Ghana as the fifth largest known reserves in sub-Saharan Africa, behind Nigeria with estimated reserves of 36 billion bbl; Angola (8 billion); Sudan (5 billion); and Gabon (2 billion). And it dwarfs Equatorial Guinea (1.1 billion), Cameroon, Ivory Coast and Mauritania which have reserves ranging from 100 million to 400 million bbl.

And for Ghana, this could be only the beginning.

Mr. Dave Hanley, the Subsurface Manager - Ghana Development, Tullow Oil Plc, the company that announced the find on its exploration bloc off Ghana’s western coast, expressed optimism recently in Accra during a presentation by UK West Africa Action Group's oil and gas trade mission to Ghana - that with more scheduled exploration drillings on their Tano Deeps bloc this last quarter of 2008 and another next year, a Jubilee Field type find should not be ruled out.

He said a few more Jubilee Field-type discoveries would propel Ghana into Angola’s league. And that could be any time soon.

With increased exploration activities and a number of drillings scheduled for the last quarter of 2008 by Kosmos Energy, Tullow, Vanco, and Hess, all operating in the West Cape Three Points and Tano blocs, expectations are high of Ghana soon increasing its known reserves significantly.

The Ghana National Petroleum Corporation (GNPC) estimates that Ghana’s three main offshore basins the Western Tano/Cape Three Points Basin, the Central Saltpond Basin and the Eastern Accra/Keta Basin, could together hold up to 26 billion barrels of oil.

This means Ghana could already be caught in the eye of big-power rivalry. Angola's experience is instructive in this instance. China’s strong influence in Angola is taken very seriously by the West. Luanda is seeking to navigate a tight course between the great powers by sharing 35-40 percent of its oil production to each of the major rivals, the US and China. Similar rivalries can be expected in Ghana, where all three powers are establishing a stake in the country's resources.

A premonition of the conflicts that could ensue in Ghana and other oil nations in the Gulf such as Angola, Nigeria and Equatorial Guinea, if these countries do not balance their act properly but show a larger preference for Beijing, can be gleaned from a peep at Sudan and Zimbabwe; nations where this is exactly the case.


Source: B&FT
Credit: Emmanuel Kwablah [emmanuel@bftghanaonline.com/ekwablah@bizandbft.biz