Ghana is benefiting more from its oil exploitation, a Deputy Energy Minister in-charge of Petroleum, Dr Mohammed Amin Adam has said.
He argued that claims by a section of Ghanaians that the West African nation is being exploited by international oil companies (IOCs) operating in Ghana’s upstream are false.
According to him, people are making those claims because of lack understanding about what goes into oil exploration and factors which are considered before oil contracts are signed.
Dr. Amin’s response was triggered by claims made by a former Chief Executive of Volta Aluminum Company (VALCO) and founder of Ghana’s Institute of Economic Affairs (IEA) Dr Charles Mensah at the 5th Ghana Renewable Energy Fair and National Energy Symposium that Ghana is being shortchanged for its oil resources.
Dr. Charles Mensah could not understand why the government of Ghana would give out oil field which is quantified at US$52 billion to the Norwegian oil and gas firm Aker Energy without considering the interest of Ghanaians.
In a rebuttal, Dr Amin stated Ghana is actually getting more from the oil exploitation contrary to the perception of a section of Ghanaians.
Dr Amin Adam said Ghana is getting 54 percent share in the Jubilee fields, 68 percent in ENI contract and 78 percent share in ExxonMobil contract.
Painting a picture of how expensive oil exploration is, Dr Amin said it would cost about US$7 billion to be able to develop an oil field, stating that Ghana does not have the financial capacity to do that.
This, he explained, is the reason the government would get in an investor who is ready to get the US$7 billion to look for the oil and also invest in the development of the field and produce the oil and share the interest with.
He offered some explanations as to what goes into oil contracts.
“The US$52 billion Dr Charles Mensah (founder of IEA) said we gave to Aker Energy, for instance, is it US$52 billion? The US$52 billion is what I believe is quantified as the value of the oil and the oil should be brought over 25 to 30 years.
“And so you tell them that let’s analyse the cost you’re spending to bring it out. So if you invest that money, you get your returns. Therefore, every cost you incur you need your returns so the sharing is actually the returns not the cost.
“But many people think when you give them the oil for the cost, then, you have given them for free. You give it to them for the cost but the returns are what the two of us share and if you look at how much we share Ghana benefits more.
“Because you have a number of things you take back.
“Ghana is getting royalty, free carried interest, you can also take additional paid interest, then your corporate tax which is 35%, if they make supernormal profit you also charge the supernormal profit so if you put all these together, Ghana has about 54% in the jubilee. We’re getting 68%in the ENI and 78% share in the ExxonMobil,” he explained.
Dr. Amin urged Ghanaians to appreciate the efforts public sector officials are doing for the nation instead of condemning them.