March 9, 2010

Making Sense of Oil Discoveries in Ghana: Part 2, a dispute with the Ivory Coast?

In Sunday’s post Making Sense of Oil Discoveries in Ghana: Part 1, I explained the oil exploration industry basics. And in my very first post on the subject, Making Sense of Ghana's Oil Discoveries: Introduction, I referred to the potentially problematic border issue:

“It gets quite complicated when the field also happens to sit in disputed areas like major gas fields between Australia and East Timor.

Australia and Indonesia jointly determined maritime boundaries between the two countries after Indonesia invaded East Timor. These boundaries favoured certain gas finds to Australia, but when East Timor gained independence from Indonesia, East Timor disputed the legality of the boundaries that Australia created with Indonesia during the illegal occupation. The boundaries deprived newly independent East Timor of revenue.

East Timor argued that the boundaries did not accord with international law. East Timor argued that they should have more share of the royalties from the development of the field. This dispute went on for years (we had an annual conference and every year they said the agreement would be finalized that year…it was, five years later) and eventually a complicated revenue sharing agreement was finalized between the countries and those companies with interests in developing the field. It was very interesting.

At least, in Ghana’s case, there are no border disputes where the blocks lay on the border with the Ivory Coast.”

I wrote.

And then, later that very day, I read: Ivory Coast Oil Claim has serious implications at My Joyonline by Fiifi Koomson.

What what what what what what what?!

So, I decided to create a separate post addressing this as simply as possible. I have included edited excerpts of Fiifi Koomson’s story here that explains the gist of the issue.

“Lands and Natural Resources Minister says the emerging claim from Ivory Coast to portions of the oil fields in the Western Region is a very delicate matter. Collins Dauda said the issue has serious international and diplomatic repercussions. Government is expecting Parliament to quickly deliberate on a bill that would establish a boundary commission to negotiate Ghana’s maritime boundaries with Ivory Coast.”

“We have not been able, as a country, to determine our boundary with Ivory Coast and there is the need for us to now determine the maritime boundary between Ghana and Ivory Coast,” he said.

All I can think is Now?

"Mr Dauda however said both countries have, for years, respected “a median line” between them that cannot be trespassed."

Respect is lovely when there’s nothing at stake. I have to say that “median line” featured heavily in discussions between Australia and East Timor.

“All of a sudden, with the oil find, Ivory Coast is making a claim that is disrespecting this median line we have all respected. In which case we would be affected or the oil find will be affected,” he said.

Who is surprised?

”Collins Dauda said, last year, Ghana appealed to the United Nations to extend its maritime boundary by 200 nautical miles.”

I think he means that the appeal was made last year. Last year?! (Mama Mia!)

”Head of Research at the Kofi Annan International Peace Keeping Training Centre, Dr Kwesi Aning, says the latest turn of events exemplifies “a failure of the state institutions to protect our national interest.”

An (unfortunately) astute observation.

”Dr Aning said there is a general lack of seriousness in ensuring the country’s boundaries are protected. The security expert is recommending a solid technical documentation studied by lawyers with expertise in petroleum issues.”

Hopefully this can be resolved faster than Australia and East Timor could resolve their differences. It should be simpler as the issues in this case are less complex (not relating to agreements with a former invading nation, for starters), but rather between amicable neighbours. But they certainly need experienced, honest and independent experts to advise. If not, I won’t be the only person in Ghana throwing my hands in the air and cursing about lost opportunities.

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