Ghana dreams of oil boom after border conflict with Abidjan

Accra – Ghana hopes to earn billions of dollars from oil exploitation to boost its economy at half mast, thanks to a court ruling that ruled in its favour in a maritime dispute with its Ivorian neighbour.

Accra has been producing black gold on a large scale since 2010, after the discovery of offshore deposits, considered to be the most important in West Africa for 10 years. A turning point that has led to renewed growth, propelling the English-speaking country to the rank of an emerging economy, and has aroused the interest of foreign investors.

But oil exploration was halted three years ago when Côte d’ Ivoire accused Ghana of offshore drilling encroaching on its territorial waters.

After unsuccessful negotiations, the case ended before the International Tribunal for the Law of the Sea (TIDM), which finally ruled in September:”Ghana did not violate” Ivorian sovereignty.

According to the operator Tullow Oil, production from its Twenboa, Enyenra and Ntomme (TEN) fields – located on the border between the two countries – is currently about 50,000 barrels a day and will continue until the end of the year.

The goal is to reach 80,000 barrels per day through the commissioning of new wells within two years. The TEN fields are part of the Tano Basin, which is home to reserves estimated at 3 to 4 billion barrels.

Economist Theo Acheampong says that at the current price of $55 a barrel, Tullow’s fields in the Tano Basin could be worth up to $165 billion.

“This is really what was at stake in this decision,” said Mr. Acheampong of London-based IHS Markit.

And in this area of the Gulf of Guinea, known for its rich oil and gas, there is probably more to discover, he says.

Need for cooperation –

Compared to other oil-producing countries in Africa, such as Nigeria and Angola, which produce more than 1.5 million barrels per day, Ghana’s production remains marginal.

According to Mr. Acheampong, the billions expected from the exploitation of new deposits will not necessarily lead to the country’s economic recovery, however.

From 2011 onwards, the Ghanaian economy did indeed have a bright future, with growth rates above 14%, but then slowed down as inflation and public debt soared.

The government obtained a loan of $918 million from the International Monetary Fund in 2015, conditional on greater fiscal discipline, lower inflation and fiscal consolidation.

The recovery is expected to continue this year and in 2018 with growth estimates at 7.1% and 8.0%, according to the African Development Bank.

This will depend on “the commissioning of new hydrocarbon wells and the rapid resolution of technical problems that led to disturbances on the Jubilee petro-gas field (very large deposit also operated by Tullow Oil, ndlr) in 2016,”the financial institution added.

Ghana’s President Nana Akufo-Addo said last month that the court’s ruling had opened up “opportunities for development, progress and prosperity.

Over the past seven years, some $3.5 billion has been used to finance development projects, new roads and hospitals, according to official figures, as required by Ghanaian law, which requires the reinvestment of a portion of black gold revenues in priority sectors.

Côte d’ Ivoire, for its part, has pledged to “respect the decision” of the Tribunal de la mer and to “cooperate fully in its implementation”, in a communiqué signed jointly with Ghana in September.

Ivorian President Alassane Ouattara has meanwhile visited Accra in October in what has been interpreted as a sign of reconciliation intended to reassure investors.

According to Benjamin Boakye, executive director of the African Centre for Energy Policy, rather than worsening relations, the court’s ruling paradoxically seems to have strengthened the ties between the two neighbours.

“Given the number of discoveries on both sides of the border, it is possible that at some point in time countries may have to come together (to manage a discovery together,”Boakye told AFP. “So this kind of cooperation is necessary.”