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Ghana Looks Ahead to Oil Exploitation

There is oil excitement in Ghana as government officials work with oil companies and civil society to plan how to exploit recently discovered offshore reserves. But many Ghanaians look with caution to the examples of neighboring oil-producing countries, and say they hope Ghana will find a way to turn oil money into real development. Naomi Schwarz has more from Dakar.

In 2007, oil was discovered in waters off Ghana, in the Gulf of Guinea, which also holds Nigeria's and Cameroon's oil reserves. Since then, says Ofosu Ahenkora, the chief executive officer of the government-appointed Ghana Energy Commission, Ghana has been working to develop a strategy to use the newfound resource to benefit the country.

"We are learning not only from the experiences of countries that have problems, we are also learning from countries that have been really successful in applying oil wealth for development," said Ahenkora.

Ahenkora says the government worries about a detrimental environmental impact and a loss of land by the local population. He says the example of the unrest in Nigeria's oil producing Niger Delta region is a sobering one.

And he says the government is even looking to learn from their own past mistakes.

"We seem to have a similar problem with gold mining in this country," said Ahenkora. "If we are able to solve this problem that will be one step forward."

George Owusu is the country manager of American-based Kosmos Energy, one of the two firms that discovered oil in Ghana. He says his company is working closely with the Ghanaian government to develop a strategy that will not harm the environment.

"We are using FPSO," he said. "When you use that, it means that the oil does not run through pipelines, which will come on shore to contaminate your line so it is not going to be the same structure that we have in Nigeria, it is a little bit different."

FPSO stands for floating production storage and offloading, a system in which the oil is processed and stored on floating platforms and can be loaded directly onto tankers to be exported. Owusu says the company will also have all the necessary equipment in place to handle any accidents that may occur.

In Ghana's western region, near where the offshore reserves have been found, there has already been increased economic activity, thanks to the oil exploration.

Nana Osenkese Ogyeahoho, a traditional ruler and a representative of chiefs from the western region, says he hopes to see a big impact for his people.

"Our expectations are that with the oil find the western region, local people should be involved. Unlike timber, gold mining and other things which have not impacted very positively on us we believe that this time around the communities should be involved," he said. "There should be a lot of development projects."

But oil companies say it could be as long as seven years before the oil begins to be extracted. Kwasi Abeasi, former Chief Executive officer of the Ghana Investment Center, says he worries the government and everyone else are already thinking too far ahead.

"In the oil industry the initial exploratory work is so risky and the investment world we have what we call wild cats," he said. "So all these are costs up front that need to be taken care of before you can start thinking of profits that can be shared."

He says Ghana needs to consider how to make production efficient so that the country and all the stakeholders can get the maximum benefit.