Ghana Courting China For Stake In Oil Field, Exxon Miffed

China’s taste for foreign oil continues this week with a trip to Ghana, where they’re jostling with Exxon to buy up a field previously owned by Kosmos, the apparently much-loathed American company who found the oil in the first place. 

Last week Dow Jones reported that Exxon had got the deal in the bag, securing Kosmos’s 23.5% stake in the field for an undisclosed amount (though people are muttering about $4bn). One analyst they spoke to said it was the start of Exxon’s ongoing development in the area, mooting that they might try and take over Andarko and/or Tullow, the two other companies holding stakes in the field. That would leave them in a strong position to sail across the whole potential strip of oil south of the Ivory Coast and ferry it back to Uncle Sam, while getting American Idol stars to chuck some cursory malaria tablets at the mainland.

But it turns out that while the deal is done, the Ghanaians are ready to cancel the contract if a better one comes along. And a better one might from CNOOC, China’s national offshore oil company, who have been heading into Nigeria, Venezuela, Canada and Iraq of late to fuel their rampant industrialisation. The Wall Street Journal reports today that their offer is being “taken seriously” by Ghana, as it apparently offers a better package of infrastructure investment than Exxon are providing; Exxon however can begin production sooner though, so that might swing it for them. They could be further hampered by claims from the Ghana National Petroleum Corporation that Exxon’s transaction was “illegal”.

It does feel strange to have the power struggles of the previous century played out in a corporate arena on African soil, colonialism with reality TV stars blurring the edges. But there’s no place for cynicism when this could be a genuine chance for coastal African nations to receive investment and income to haul their respective societies out of poverty. Some are saying that Ghana has a better chance than most to effectively hold on to and fairly redistribute its newfound oil wealth; in the past revenue has ended up in the hands of a tiny few, or been spent on arms rather than schools. Ghana’s president John Atta Mills was yesterday calling for transparency over the next few years so that the money doesn’t end up in a businessman’s pocket, and reminded multinationals of their social responsibilities.

But if the comments of Rwandan president Paul Kagame yesterday are representative of Africa’s wider feelings towards the West, you can expect China to be holding onto more of Africa’s oil in the future – he said that while the West “polluted Africa to a large extent”, China was more forthcoming with investment for infrastructure and society. It could be that the West’s cavalier, profit-focused attitude towards the continent could come back to haunt them in the race for global energy security.

Photo: Stig Nygaard @ Flickr

Posted by Ben Beaumont-Thomas in Green Rush | October 13, 2009 11:09AM |