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From Refining to Smuggling: The Everyday Politics of Petrol in Ghana Monica Skaten PhD in African Studies University of Edinburgh 2017 1 2 Declaration I declare that the thesis has been composed by myself and that the work has not been submitted for any other degree or professional qualification. I confirm that the work submitted is my own. My contribution and those of the other authors to this work have been explicitly indicated below. Monica Skaten March 2017 Edinburgh, UK 3 4 Abstract From Refining to Smuggling: The Everyday Politics of Petrol in Ghana This thesis presents an ethnographic study of the downstream petroleum industry in Ghana focusing on trade, infrastructure, flow, politics and social relationships. In 2010, the West African Republic of Ghana started pumping crude oil from the offshore Jubilee-field. The rapid development from discovery to extraction, along with economic expectations generated by the development of the new upstream industry, led to exponential growth in the downstream industry. A liberalisation reform of the downstream industry was initiated in 2005 and the state started to redefine its role in the petroleum industry, allowing a range of private entrepreneurs to participate in the downstream sector. On the back of these key transformations of the industry, this thesis demonstrates the continuous politicisation of petroleum products on a national level and the significance of this politicisation on infrastructure, networks and social relationships throughout the industry. This thesis argues that the trade, distribution and price of petroleum products in Ghana facilitates and shapes political and economic reciprocity between the government, the publics and profitable economic networks. Even though there was adequate infrastructure such as refinery, pipelines and petroleum storage depots, petroleum products in Ghana were distributed in a way that allowed the most number of people to come into contact with petroleum, by having access to the actual product, but also through enabling job creation and profitable economic activities. The petroleum infrastructure would obstruct profitable networks and informal markets. I propose the term ‘Politics of Petrol’ to emphasise how the industry and the commodities were part and parcel of the political and social fabric in Ghana. Reflecting the negotiable nature of politics and reform alongside the changeable practices and networks in the industry - Politics of Petrol - demonstrates the productive purpose of petroleum in Ghana’s democracy. 5 Table of Contents DECLARATION 3 ABSTRACT 5 TABLE OF CONTENTS 6 LIST OF ACRONYMS 9 LIST OF ILLUSTRATIONS 10 ACKNOWLEDGEMENTS 11 INTRODUCTION 12 RUSH TO ‘FIRST OIL’ 13 DOWNSTREAM BOOM 18 INDUSTRY TOPOGRAPHY: WHY FOCUS ON THE DOWNSTREAM INDUSTRY? 20 MANAGING SCOPE AND ANALYTICAL CATEGORIES 26 TRACKING OIL: FIELD SITES AND METHODOLOGY 30 FIELD SITES 30 ETHNOGRAPHY AND ETHICS 35 CHAPTER ONE 41 THE POLITICS OF PETROL IN GHANA 41 INTRODUCTION 41 THE POLITICS OF PETROL 41 “IT’S POLITICAL” 42 THE POLITICISATION OF PETROLEUM PRODUCTS IN GHANA 48 LEGACIES: AFFORDABLE PETROL AND STATE CONTROL 48 THE FOURTH REPUBLIC: COMPETITION, ELECTIONS AND REFORM 55 OIL, STATE AND SOCIETY 60 ANTHROPOLOGY, OIL AND NEOLIBERALISM 67 CONCLUSION 73 CHAPTER TWO 75 ‘POLITICS’ AT TEMA OIL REFINERY 75 INTRODUCTION 75 REFINING THE NATION: PETROL MADE IN GHANA 76 6 NATIONALISATION OF THE REFINERY: YEARS OF TROUBLE 83 DEMOCRACY, DEREGULATION AND DISCOVERY 86 GAS PROCESSING: DISTRACTING ATTENTION 93 THE MISSING CARGO: EVERYDAY LIFE AT TEMA OIL REFINERY 95 CONCLUSION 104 CHAPTER THREE 107 THE TEMA HEAVY INDUSTRIAL AREA AND REFORM 107 INTRODUCTION 107 EVERYDAY BUSINESS AT TEMA HEAVY INDUSTRIAL AREA 108 THE REGULATOR: THE NATIONAL PETROLEUM AUTHORITY 111 EXPANSION AND ‘DEREGULATION’: ‘BDCS AND OMCS’ 114 “THE SYSTEM IS TOO MUCH”: VOICES FROM ESTABLISHED PETROLEUM ACTORS 119 NAAGAMNI OIL: THE POLITICS OF PETROL IN NEW SPACES 123 CLEANING UP THE INDUSTRY: CONTINUITIES IN THE POLITICS OF PETROL 131 CONCLUSION 137 CHAPTER FOUR 139 WAITING FOR PETROL 139 INTRODUCTION 139 BOST AND BUIPE 139 “IT’S COMING” 142 WAITING, RUMOURS AND INFRASTRUCTURE 146 THE ‘POLITICS’ OF DISTRIBUTION 153 PETROLEUM STORAGE DEPOTS: THEFT AND UNCERTAINTY 154 PETROLEUM BARGES AND PIPELINES: MAINTENANCE AS ‘POLITICS’ 158 TRUCKS: DISTRIBUTION POLITICS AND UNIFIED PETROLEUM PRICE FUND 162 CONCLUSION: WHY WAIT? 164 CHAPTER FIVE 167 SAFETY, CONTAMINATION ‘POLITICS’ AND PETROLEUM HIERARCHIES 167 INTRODUCTION 167 THE EXPLOSION AT NKRUMAH CIRCLE 168 RISK IN THE ASHANTI REGION: NPA AND THE PETROLEUM PRODUCT MARKETING SCHEME 172 ADULTERATION AND CONTAMINATION 174 ON FIELD INSPECTIONS 180 SAFETY HIERARCHIES 188 CONCLUSION 195 CHAPTER SIX 197 THE PRICE OF PETROL 197 7 INTRODUCTION 197 PRICE REFORM AND RESISTANCE 198 THE NEW PRICING REGIME: THE POLITICS OF TRANSPARENCY 205 HARM AND CARE: POLITICS OF PETROL PRICE BEYOND THE ACRONYMS 212 EXTERNALITIES IN THE POLITICAL PROJECT 215 OIL TRADING: ELITE ACCUMULATION 217 LIQUEFIED PETROLEUM GAS (LPG) 220 SMUGGLING 223 CONCLUSION 231 CHAPTER SEVEN 233 THE NATIONAL FUEL SHORTAGE OF 2014 233 INTRODUCTION 233 CRISIS: SHORTAGES AND INFORMAL MARKETS 234 ‘ARTIFICIAL SHORTAGE’: FILLING STATIONS OWNERS’ USEFUL SCAPEGOATS 239 NEGOTIATING THE SHORTAGES: BDCS SHOWING MUSCLES 242 CONSOLIDATING RELATIONSHIPS 245 NORTHERN PRIORITIES AND DISTRIBUTION 250 WHEN THE DUST SETTLES: THE AFTERMATH OF THE SHORTAGE 255 CONCLUSION 258 CONCLUSION 261 INTRODUCTION 261 RETURNING TO THE INDUSTRY 261 THE POLITICS OF PETROL 264 REFORM 265 UPSTREAM – DOWNSTREAM 267 CONCLUSION 269 APPENDIX 1:PETROLEUM PRICE BUILD UP PER 20TH NOVEMBER 2014 270 BIBLIOGRAPHY 271 8 List of Acronyms Automatic Petroleum Product Price Formula (APPPF) Bulk Distributing Company (BDC) Bulk Oil Storage and Transportation Company (BOST) Floating Production and Storage Operator (FPSO) Ghana National Petroleum Corporation (GNPC) Ghana Oil Company (Goil) Health Safety and Environment (HSE) Letter of Credit (LC) Liquefied Petroleum Gas (LPG) National Democratic Congress (NDC) National Patriotic Party (NPP) National Petroleum Authority (NPA) Oil Marketing Company (OMC) Oil Trading Company (OTC) Petroleum Product Marketing Scheme (PPMS) Residual Fuel Catalytic Cracker (RFCC) Tema Heavy Industrial Area (THIA) Tema Oil Refinery (TOR) Tweneboa, Enyenra and Ntomma (TEN) Unified Petroleum Price Fund (UPPF) 9 List of illustrations Introduction: Table 0.1: Benchmark Project Timelines in West Africa. Cairn Energy (2015). Image 0.2: Ghana’s Offshore Oil Fields. Ghana Oil Watch (2015). Table 0.3: Fieldwork Timeline 2013-2014. Author (2014). Image 0.4: Field Site Locations. Google Maps (2016). Chapter 2: Image 2.0: Kwame Nkrumah and Italian Visitors. (TOR, 2017). Image 2.1: Opening Ceremony. (TOR, 2017). Image 2.2: Tema Refinery. Author (2014). Image 2.3: TOR Workers at Rally. (Ocloo and Mordey, 2016). Image 2.4: MD of TOR. (Ocloo and Mordey, 2016). Chapter 3: Table 3.0: Source: NPA Statistics 2016, Table: Author (2016). Image 3.1: Sumaila at a filling station in Tamale. Author (2014). Image 3.2: Naagamni Logo. (2014). Image 3.3: THIA Office Pink Cable Ties. Author (2013). Chapter 4: Image 4.0: State-Owned Petroleum Infrastructure in Ghana. Google Maps (2014). Image 4.1: Satellite Image of Buipe Town, Port and Petroleum Storage Depot. Google Maps (2014). Chapter 5: Image 5.0: Figure x: My Own Rendition of Atsu’s Drawing. Author (2014). Image 5.1: Rural filling stations in Ashanti Region. Author (2013). Image 5.2: Temporary outlet. Author (2013). Image 5.3: Taking Underground Tank Samples. Author (2013). Image 5.4: Trying to Charge the American Machine. Author (2013). Chapter 6: Table 6.0: Dataset NPA 2016. Table: Author (2016). Table 6.1: Dataset NPA 2016. Table: Author (2016). Table 6.2: Data: NPA 2014. Chart: Author (2016). Table 6.3: Data: NPA 2014. Table: Author (2016). Image 6.4: The Ghanaian Times. Author (2016). Image 6.5: Paga at the Ghanaian Border with Burkina Faso. Google Maps (2016). Chapter 7: Image 7.0: Informal Sale of Petroleum Products. Author (2014). Image 7.1: Naagamni Filling Station in Tamale during the Shortage. Author (2014). 10 Acknowledgements I would like to express my sincere gratitude to my supervisors Dr. Gerhard Anders and Dr. José Maria Munoz. I could not have asked for a better team! The two excellent scholars have given me patient guidance, encouragement and support. Their comments on uncountable drafts have shaped this thesis in many ways. Gerhard and José are brilliant supervisors, but most of all inspiring and good people. For everything, thank you! There are many people in Ghana that contributed to the research and that made my time there a rich and fulfilling experience. Sumaila Mesuna opened his home, business and social networks beyond what I could have asked for. I am forever grateful for everything he did for my research and for his efforts to keep me safe and in good health. I further like to thank Osman Mesuna, Nasara Mesuna and Sawatu Mesuna for their hospitality and friendship. Appreciation goes to every single manager and worker of Naagamni Oil that has accommodated me in offices and filling stations across Ghana. A special thanks also goes to Issah Charles, Bryan Nabia and Fuseni Ayologo for helping me at various field sites. I appreciate all the help and contacts I was granted through the Norwegian Embassy in Ghana.