Monday, December 24, 2007

Oil boom: Will Ghana look before it leaps?

Ghana's president said Saturday that offshore oil reserves discovered in the West African country's waters total 3 billion barrels.

From Associated Press:

"Ghana has struck oil in commercial quantities," President John Kufuor said, speaking at a ruling party congress in the capital, Accra. "This is only the beginning. The future is very bright indeed."

Hmm. Before getting into oil’s great gift for social and economic instability or the tremendous amount of human oil leeches (as a friend puts it) who will uproot and plant themselves in Ghana, spreading cynicism and disease everywhere in their wakes, let’s first talk about what these numbers represent:

If the three billion barrel number is correct, it would put Ghana a tad below the world’s top twenty largest oil reserves, which account for up to 95 percent of the planet’s total. Not too bad. But still 10 times less than Nigeria’s reserves, and almost 100 times less than Saudi Arabia, time and again the world’s proven leader in black gold.

The three billion barrel amount puts Ghana in tune with countries like Vietnam, Yemen and Syria, states not altogether known for oil production. On the other hand, Gabon has less documented reserves than Kufor states Ghana has, but the country seems to get along with little else than petroleum and the work of expatriate Africans.

On first glance, Ghana shouldn’t be cashing in all its casino chips in hopes of hitting the big time. All other issues being equal, oil can possibly help a country – especially when a barrel of crude runs at $85. It will take much prudence from the government, however, to resist turning a pretty good success story into another nightmare.

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