On November 3, 2011, fishermen working near
the Jubilee oil field 60 km. off the coast of Ghana spotted a large oil
slick floating towards land.
The next day a dark, syrupy ooze
arrived onshore, coating beaches of several fishing communities and
waterfront hotels in Ghana’s Ahanta West District, the coastal strip
closest to the country’s new, deep water oil field.
The fishermen
told authorities they suspected the spill came from the offshore
operations, but the incident was greeted with seeming indifference. No
official clean-up was launched, so the community was left to clean up
the mess itself.
“The lack of any clear information about the
incident has made many in the coastal communities nervous about the
future,” said Kyei Kwadwo Yamoah of the Friends of the Nation, a
Ghanaian community development organization.
Even as the Jubilee
field was in development, environmentalists warned it was moving too
fast. To activists, official silence surrounding the November incident
was evidence that Ghana lacked the ability to properly oversee offshore
oil operations.
Reports by non-governmental organizations
show
that the companies that developed the Jubilee field, and the
World Bank
Group officials who lent hundreds of millions of dollars to jumpstart
the project, were aware of the risks from the beginning. What’s also
clear is that everyone knew the Ghanaian government lacked adequate
monitoring systems, regulators to police the industry and equipment
needed to react to spills.
Located along Africa’s Atlantic Coast,
Ghana is slipping down the same unregulated slope as other countries
that hug the Gulf of Guinea: Promises of economic development along with
a lure of easy money have prompted governments to encourage the rapid
growth of an industry in a regulatory vacuum.
The oil industry, in effect, is left to monitor itself.
Speedy oil development
Ghana’s
Western Region boasts some of the country’s most striking coastline.
Rocky coves and tidal pools give way to palm-fringed stretches of sandy
beach where dolphins and sea birds dash in and out of crashing surf and
where a lucky visitor might spot a nesting turtle.
Historically,
the coastal region’s economy has depended on fishing, which benefits 2
million people — 8 percent of Ghana’s population — but is predicted to
unduly suffer from pollution generated by oil operations.
Government and
industry officials acknowledge that they have no compensation fund to
support fishing communities in the event of a major spill — the type of
response that kick-started recovery in U.S. Gulf Coast states after the
2010 Deepwater Horizon disaster.
That reality leaves many coastal
residents and environmental activists doubting the government’s promise
that in Ghana, oil would be a blessing, not a curse.
What they’ve
seen instead is a fast embrace of the industry: local boosters quickly
adopted the nickname “Oil City” for the coastal region’s capital,
Sekondi-Takoradi.
When
U.K.-based Tullow Oil announced in June
2007 that it had
discovered oil in commercial quantities, no one
expected that crude would flow just three and a half years later. At the
time, Tullow officials spoke of needing up to seven years to develop
the field.
But boosted by $215 million in loans from the
International Finance Corporation (IFC) — the private financing arm of
the World Bank — Tullow and its partners, the American companies Kosmos
Energy and Anadarko Petroleum Corporation, were able to get the $3
billion Jubilee field ready in record time.
Ghana became the
latest West African country to share in an oil exploration boom that had
taken on new emphasis after the September 11, 2001 terrorist attacks.
Companies
like ExxonMobil and Chevron-Texaco had been major players in Equatorial
Guinea, Angola and Nigeria since the 1990s. After the terrorist
attacks, the United States looked increasingly to Africa as a “safe”
alternative to Middle Eastern oil.
Then-President George W. Bush
traveled twice to sub-Saharan Africa and met with a number of African
heads of state. Exploration in the Gulf of Guinea was pushed by rising
oil prices and advances in deep-water drilling technology. Nine years
later the Deepwater Horizon oil disaster gave African offshore
development an unexpected boost.
From one gulf to another
“The
moratorium on deep-water drilling in the Gulf of Mexico left a lot of
drilling rigs with nothing to do and then the oil companies are faced
with these half-a-million-dollar-a-day contracts with nothing to do,”
said Stuart Wheaton, development director for Tullow Oil Ghana.
Operators moved rigs from the Gulf of Mexico to oil fields around the world and some made it to West African waters.
In
those same waters, Ghana’s offshore development had gotten its head
start from the IFC, whose loans served as a “green light” for other
potential investors.
Mary-Jean Moyo, the IFC’s country manager for
Ghana, said the corporation’s financial backing in 2009 was crucial in
attracting other private investors to the Jubilee project.
“This
was at the height of the global financial crisis, so IFC played quite a
critical role in terms of being a catalyst,” Moyo said. Without the IFC,
“it might have been difficult to raise additional international
financing.”
Moyo also said
the Jubilee project was classified as
low risk for Ghana because “this is offshore and there weren’t any
onshore impacts in terms of social displacement, in terms of destruction
to mangroves.”
But oil industry analysts at Oxfam America, the
global relief and development organization, said the
IFC agreed to help
finance the project before fully addressing safety and environmental
concerns. Moyo acknowledged that the
IFC loans to Tullow Oil and Kosmos
Energy were approved before the required environmental impact studies
had been completed. She pointed out that
IFC financing followed strict
rules, including “adherence to international safety standards in terms
of having very good oil spill response plans and adequate safety
measures.”
Ian Gary, Oxfam’s top expert on extractive industries,
said this sent a bad signal:
“Bringing the project to a board vote prior
to the completion of the environmental Impact assessment weakens
international norms, since one of the basic purposes of an (assessment)
is to determine whether, and under what conditions, a project should be
supported.”
In a review of environmental documentation prepared by
the IFC, the environmental organization Pacific Environment also
questioned IFC support for the project, citing:
“Inadequate assessment
of impacts on endangered species and critical habitats; inadequate
assessment of noise impacts on marine mammals, dumping of drilling
wastes into the sea,” and a failure to demonstrate compliance with
international standards.
Industry officials say the risks of the Jubilee development are manageable.
“It’s
fair to say the capacity and capability for national emergency response
is low, but we’ll just have to keep working at it as the years go by,”
said Tullow Oil’s Wheaton.
“Everything has some sort of risk
associated with it, so you try to minimize those risks and if we do have
a spill, what we have done is we’ve brought equipment in,” he added.
The
company has clean-up equipment on-site and is a member of the
industry-funded Oil Spill Response Ltd., an organization that says it
can airlift equipment from the U.K. within 24 hours in the event of a
major spill.
Mohammed Amin Adam, a government transparency
advocate and cofounder of Ghana’s Civil Society Platform on Oil and Gas
said his country doesn’t even have “the legal … frameworks to respond to
these issues.”
Even though Jubilee field production has started,
Ghana has yet to update environmental laws governing extractive
industries that were written a generation ago. Ghanaian officials said
new legislation will be considered this year.
Ghanaian environmental officials also said they are prepared to act in case of a spill.
“There’s
a National Security Coordinating Committee involving the military, the
navy, the police and local councils … the Ministry, the Maritime
Authority,” said Sherry Ayittey, Ghana’s environment minister. “There is
an emergency response unit always being trained, so that in the event
of a spillage, within 24 hours, we would be able to move to the location
and then handle the issue as quickly as possible.”
Regulatory vacuum
Production
from the Jubilee field hovers at around 80,000 barrels per day, but
that’s expected to increase substantially over the next decade.
At
Ghana’s April 2011 Oil and Gas Summit, Willy Olsen, former senior
adviser to Norway’s Statoil,
predicted Ghana would become the region’s
third-largest producer after Nigeria and Angola, “pumping upwards of
500,000 barrels per day.”
As proof of their technical expertise,
Ghanaian government and oil company officials have touted the pace at
which the Jubilee field was brought to production.
Environmentalists point out that the country’s first deep-water oil project was its first major oil project of any kind.
Amid
the ramp-up to commercial production, the
Deepwater Horizon spill
occurred.
The blowout of the Macondo well off the Louisiana coast on
April 20, 2010 was an “eye-opener” according to one Ghanaian official,
who said the blast prompted the government to review all of its safety
procedures.
The Deepwater Horizon disaster did not slow down
Jubilee development, however, and the government review has yet to yield
any new regulation.
In October 2011, Offshore Magazine reported
on a deep-water technology conference in New Orleans where
Dennis
McLaughlin, Senior Vice President with Kosmos Energy, gave a talk
titled,
“Reviewing Lessons learned from the Jubilee project.” In it he
acknowledged that,
“large deep-water projects are inherently difficult
and risky,” and then described what it was like to develop the Jubilee
field in a country with no regulatory or commercial infrastructure.
During
the Jubilee field development Kosmos Energy experienced several
mishaps. The company acknowledged spilling toxic drilling mud on three
occasions, including a spill of some 600 barrels (25,000 gallons) in
December 2009.
Cephas Egbefome an environmental issues researcher
for Ghana’s parliament, said the government
fined Kosmos $35 million for
negligence.
But the fine, which Kosmos challenged as not
following Ghanaian law and ultimately did not pay, raised a number of
concerns, Egbefome said.
The government probe was quick and opaque; the
methodology for determining the fine was unclear. “Kosmos openly
challenged the legal basis of the fine, describing it as totally
unlawful,” he said.
Transparency activist Mohammed Amin Adam takes up the story:
“What
the law says is that in the event of a disaster, a spill, the polluter
must pay. But the law doesn’t talk about a fine,” he said.
“Kosmos
spilled mud, a committee was set up to investigate Kosmos and the
committee came out with a fine, contrary to our law.
“What
government needed to do was to get Kosmos to clean and pay for the
cleaning,” Amin Adam said.
“We just slapped a fine on them. And so they
came to raise legal questions: whether we had the legal mandate, the
authority to slap a fine on them.”
Kosmos declined to answer questions about the mud spills.
Instead
Jim McCarthy, the media relations representative for the company
sent
ICIJ a press release on the “amicable” resolution of several issues:
“Kosmos and the Ministry of Science, Environment and Technology have
agreed to a solution with respect to the accidental mud discharges
offshore Ghana earlier this year whereby Kosmos would support the
Ministry’s efforts to build capacity in the environmental sector.”
Daniel Amlalo, Ghana’s acting Enviromental Protection Agency director, said the mud spills were properly addressed.
“Lessons have been learned from that and government has put measures in place to ensure that it does not happen again,” he said.
A regional problem
Ghana’s
troubled regulation of the offshore oil industry sits against a
backdrop of other West African nations with dubious environmental
records.
The
Nigerian oil industry,
already infamous for its
disastrous environmental record in the Niger Delta, also has problems
offshore.
In December, Shell said a spill occurred at its Bonga field,
approximately 120 km. off Nigeria’s coast.
This past December 20th
and 21st, oil spewed from a ruptured fuel line connecting the Bonga
platform to a waiting tanker.
Before workers noticed the spill, Shell
said that up to 40,000 barrels (1.68 million gallons) had leaked,
reportedly making it the worst offshore accident in Nigeria since 1988.
The
Nigerian government takes a hands-off approach to clean-up operations,
maintaining little in the way of vessels or equipment.
Each company
operating in the country is required to stockpile clean-up equipment and
the industry leaders in Nigeria have also enlisted the U.K.’s Oil Spill
Response Ltd.
After the December spills, Nigerian Senator
Abubakar Kukola Saraki denounced the National Oil Spill Detection and
Response Agency for having to “rely almost exclusively on the grace and
benevolence of the oil companies” in a clean-up effort.
After
years of denial,
Royal Dutch Shell recently acknowledged that
“operational issues” were responsible for two other large spills in
Nigeria’s Ogoniland in 2008 – pollution in the Niger Delta that the
United Nations Environment Program said would cost $1 billion to clean
up.
Shell said sabotage is thwarting clean-up efforts and more
than three years later, oil remains in the water and on land.
A November
2011 report from Amnesty International says the spills destroyed the
livelihoods of 69,000 people.
Angola offers another bad example,
said Kristin Reed, an environmental researcher at the Human Rights
Center at the University of California, Berkeley.
Reed described
Angola’s oil industry as one without any state or independent monitoring
or oversight. She said the situation is made worse by
Angola’s press
restrictions that limit public information about oil operations.
Anecdotal news of spills and pollution sometimes spreads via blogs and
the Internet but official details on incidents and who’s to blame are
rarely available.
And the tiny nation of
Equatorial Guinea, an oil
producer since the mid-1990s, also has no spill response plan, no
clean-up equipment or vessels, no independent press and no agreements
with neighboring countries to combat pollution.
In Equatorial Guinea, oil companies monitor themselves and handle their own cleanups.
The
ICIJ asked ExxonMobil, how the oil companies conduct self-monitoring in the region and to whom they report.
David Eglinton, a spokesman for ExxonMobil, promised a response. He has yet to give one.
Dead whales
In
Sekondi-Takoradi, Ghana’s “Oil City,” activists from
Friends of the
Nation work with the communities closest to offshore drilling
operations.
In two years of monitoring on behalf of local residents, the group’s Kyei Yamoah, has noted an increase in whale deaths.
“A
whale washed ashore in October, bringing the total number of dead
whales on our beaches since late 2009 to eight,” Yamoah said.
“After
the death of the first whale, (the government) claimed they had taken
samples to determine the cause, but they have never made their reports
public,” Yamoah said.
“Now we have seven more [dead whales].”
This
past spring,
the Civil Society Platform on Oil and Gas, a group that
includes industry experts, government officials and community activists,
issued a “report card” on Ghana’s emerging oil business. Speakers at
the report’s unveiling included Alhaji Inusah Fuseini, Ghana’s deputy
energy minister, and Ishac Diwan, the World Bank’s Ghana country
director.
The report commended the government’s transparency
efforts and the passage of an oil revenue management plan, but gave the
industry and government regulators a “D” grade on social and
environmental issues. The report said pollution controls and
environmental regulation of the offshore industry are still just
legislative proposals.
Ghanaian transparency advocate Mohammed
Amin Adam said the report was designed to draw attention to the
potential danger the country faces.
The attention is needed, said
Ghanaian government researcher Cephas Egbefome, because the environment
and risks in offshore oil production seem to be non-issues for most
politicians and the public.
In a country where a significant
percentage of the population struggles just to get by, Egbefome said,
it’s hard to muster much concern for an oil operation 60 km offshore
that few can see.
Christiane Badgley is a journalist and
documentary film producer who follows oil development in Africa. This
article was produced in cooperation with the Pulitzer Center on Crisis
Reporting. Click here to see more of her Ghana oil reports.
