20100610
Afrol

Ghana, expected to become a net oil exporter next year, has been endowed with yet another offshore oil discovery. The Ghanaian deepwater offshore region now seems commercially viable, but analysts warn of an emerging "oil curse".

The Ireland-based company Tullow Oil has reported yet another oil discovery on the Jubilee field off Ghana. The hired Atwood Hunter rig had "encountered oil in four out of five wells in the exploration and appraisal programme in the area immediately to the southeast of the Jubilee Field," Tullow's Angus McCoss said in a statement.

The Mahogany-5 well, where the latest discovery was made, was drilled to a total depth of 3,988 metres in a water depth of 1,149 metres. The well is located approximately 62 kilometres offshore and about 7 kilometres southeast of the Mahogany-1 well, the Jubilee discovery well.

According to Mr McCoss, the four oil strikes on the Jubilee deepwater field boded well for commercial activities. But Tullow now "aims to discover even more hydrocarbons to further enhance the commercial development of this licence," he announced.

But further exploration on the Jubilee field would have to wait until October. The rig is now to leave Ghana to work for another operator. It is scheduled to return to Ghana in the fourth quarter of 2010 on a planned nine-month drilling programme in the West Cape Three Points licence.

Anyway, the discoveries on the Jubilee field already have been big enough for oil production being planned to start in December this year. By now, reserves of 800 million barrels of oil have been documented offshore Ghana

With continued oil discoveries, Ghana is now slowly moving forwards to an oil economy. But only slowly, as the latest analysis of the Ghanaian economy by the International Monetary Fund (IMF) - released yesterday - reveals.

"Looking to 2011–12, the fiscal space created by Ghana's move to oil producer status will initially be modest," IMF analysts hold. As Ghanaians are gearing up for oil revenues and hoping for more government spending, the IMF strongly warns against such ideas before substantial oil exports are secured.

"It will be important to tailor spending plans to available resources," the IMF warns the Ghanaian government. Government spending was already exaggerated and based on too many unsecure loans. The Fund therefore called for "regaining control over the budget and for prudent use of Ghana's future oil resources."

Further, structures to avoid the "oil curse" were still not in place in Ghana. "Transparency in managing oil revenues and related spending will be key," the Fund's analysts advised. Also, the "the under-pricing of energy products" in Ghana was still a problem that needed to be addressed.

But both the Accra government and Ghanaians at large are well aware of the oil curse, knowing all too well how nearby Nigeria has failed to profit from its enormous wealth. There is therefore a public demand in the well-founded democracy to avoid anything that resembles Nigeria in Ghana's future oil bonanza.

President John Atta Mills is soon to present extensive oil management policies and legislation to the Accra parliament, following a long advising process from the IMF and other, non-Nigerian oil producing countries.