Business in Ghana

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Critical News 1st August, 2010

Posted by Business in Ghana on August 2, 2010

Glory, Glory, Glory!  What a start to the week.  The New Crusading Guide blessed the week with the story of the year so far.  Tsatsu Tsikata involved in a contentious (have to be careful here, might cause Fear and Panic!) contract with MODEC, the builders and managers of the FPSO Kwame Nkrumah.  Rather longwinded so here are the essential facts as I see them.  Tsatsu signed a contract to provide advisory services to MODEC back in 2008 when he was in custody.  The IFC through the Multi-lateral Investment Guarantee Agency (MIGA) were only recently told of this contract.  Both the IFC and MIGA are heavily invested in the FPSO, which is owned by Jubilee Ghana BV 21, a special purpose company, set up to raise funds for the development of the Jubilee field unit in West Cape 3 Points.  This also involves Tullow, Kosmos, Anadarko, the EO Group, Sabre Oil and GNPC.  I will do a very detailed report on the shareholding structure of all this in the coming week.  It will impress you! trust me.  Anyway, the IFC and MIGA are p***** off because they were only told at the back end.  The contract is for $5million, two has been paid, all of it during the NDC era and the remainder to be paid when the first oils starts.  Great start to the week!  It got more interesting as the days rolled forward, and Tsatsu publicly threatened to sue through his company Strategic Oil and Gas.  He owns 50% of the company and we are yet to know who owns the other half!  This story will run for a long time.  Until the due diligence is completed and the IFC and MIGA are content, the FPSO will not be storing any oil!  Imagine what this will mean to Ghanaians if one person’s greed halts our whole economic jump off!

STX is still raging and Alban Bagbin, soiled himself twice.  Once at a press conference he called and referred to the opposition as nakedly envious of the successfully negotiated contract with the Koreans and secondly on the Paul Adom Okyere show, Good Evening Ghana on Metro TV.  Even I felt sorry for him as I coined the term “to do a Bagbin” meaning “arrogantly ignorant”.  It was a sham, as he consistently tried to defend the indefensible for an hour.  Paul did a good job, brought up the key issues and controversies and anyone watching the program should have walked away in shame.  The text messages that came through were even more scathing.  The finer points of our democracy are glaringly obvious now.  This Government is struggling to explain itself.  STX is back in Parliament next week and we will see how the opposition handles the next phase.

A head pastor from the Calvary Baptist Church, Rev Opoku Agyemang, in Kwadaso-Nzema in Kumasi, locked himself up in his room before committing suicide.  The big news is why.  Not for money, they said he had high blood pressure.  Well Duh! That cannot be the real story.   It must be juicier than that since he was the model priest.  We have to wait for this one to unfold.  The story died nearly the same day it broke.

Retail bank rates started coming down, ADB announced the really major cut and started a downtrend.  Was this in response to Government pleas?  Me thinks not.  Not when rates are still in the mid-20’s and above.  Who can really do business with rates like that?  The debate is still raging and one might have an opportunity to input some more.  Dr Joe Abbey of the policy think tank, CEPA has a view and he does not hold back.

Finally, Exxon Mobil, Kosmos and GNPC.  Did I say sometime ago that GNPC would do a U turn?  Maybe not in this series.  Kosmos has raised money from Warburg Pincus and Blackstone, two of the wealthiest private equity firms in the world.  Between the two of them they manage assets worth over $148 billion.  They can buy Ghana nearly 10 times over.  Why on earth GNPC thought they could bully KOSMOS into selling to them, I have no idea.  Anyway, Prez Mills asked GNPC to sort the matter out, this past week, so far, no announcement.  Wait till next week, when we stoke the fires one more time.  Meanwhile KOSMOS is just “drill baby, drilling”.  The latest Mahogany-5 well could well confirm that Ghana’s reserves are 5 times greater than what we have found so far.  All that said, I think the GNPC KOSMOS debacle is more about the politics involving the EO (Edusei and Owusu) Group than it is about business.  Let the story unfold!

Ghana, aha a ye de papa! alius valde week advenio. Another great week to come!

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One Response to “Critical News 1st August, 2010”

  1. Mavis said

    Thanks so much for the update. I’m really impressed and i feel up to date with current and burning issues. Please keep semding me more.
    Very appreciative.

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