THE DISCOVERY OF OIL IN GHANA: MEETING THE EXPECTATIONS OF LOCAL PEOPLE Rosemond M. E. Agbefu Thesis submitted in partial fulfillment of the requirements for the Degree of Master of Philosophy in Culture, Environment and Sustainability Centre for Development and the Environment University of Oslo, Blindern, Norway ii Table of Contents DEDICATION .................................................................................................................................. VII ACKNOWLEDGEMENT .............................................................................................................. VIII LIST OF ABBREVIATIONS AND ACRONYMS ........................................................................... X LIST OF TABLES .......................................................................................................................... XIII LIST OF FIGURES......................................................................................................................... XIV MAP OF GHANA SHOWING THE GULF OF GUINEA AND THE JUBILEE OIL FIELDS XV ABSTRACT ..................................................................................................................................... XVI 1. INTRODUCTION...................................................................................................................... 1 1.1 BACKGROUND TO STUDY ......................................................................................................... 1 1.2 RESEARCH QUESTIONS ............................................................................................................ 3 1.3 RATIONALE FOR STUDY ........................................................................................................... 3 1.4 PROFILE OF GHANA‟S OIL REGION: THE WESTERN REGION ...................................................... 4 1.4.1 Profile of the districts adjoining the Jubilee field ........................................................ 6 1.5 DESCRIPTION OF STUDY AREA ................................................................................................. 7 1.6 ON INTERDISCIPLINARY STUDIES ........................................................................................... 11 1.7 STRUCTURE OF THESIS ........................................................................................................... 12 2. RESEARCH METHODOLOGY ........................................................................................... 14 2.1 INTRODUCTION ...................................................................................................................... 14 2.1.1 Pre-fieldwork arrangements: Establishing contacts .................................................. 14 2.2 METHODOLOGY AND METHODS OF DATA COLLECTION .......................................................... 15 2.2.1 Choosing Informants .................................................................................................. 16 2.2.2 Sampling ..................................................................................................................... 17 2.3 STAKEHOLDERS IN GHANA‟S OIL INDUSTRY........................................................................... 18 2.4 QUALITATIVE RESEARCH AND FLEXIBLE DESIGN ................................................................... 19 2.4.1 Interviews ................................................................................................................... 21 iii 2.4.2 Group Interviews ........................................................................................................ 23 2.5 RELIABILITY AND VALIDITY IN QUALITATIVE STUDIES .......................................................... 25 2.6 GAINING ACCESS ................................................................................................................... 27 2.6.1 Social situations and conditions ................................................................................. 28 2.6.2 Power relations and imbalances ................................................................................ 29 2.6.3 Conflict of interest ...................................................................................................... 29 2.7 ETHICAL ISSUES ..................................................................................................................... 30 2.7.1 Status of the researcher: Outsider and Insider roles .................................................. 32 2.8 STORAGE AND TRANSCRIPTIONS OF DATA .............................................................................. 33 2.9 REFLEXIVITY AND LIMITATIONS ............................................................................................ 34 3. CONCEPTUAL FRAMEWORK ........................................................................................... 38 3.1 INTRODUCTION ...................................................................................................................... 38 3.2 THE SUSTAINABLE LIVELIHOOD APPROACH AND THE LIFE OF THE RURAL POOR .................... 38 3.2.1 Definition of concepts ................................................................................................. 39 3.3 THE SUSTAINABLE LIVELIHOOD FRAMEWORK (SLF) ............................................................ 40 3.3.1 Livelihood Assets ........................................................................................................ 42 3.3.2 Vulnerability Context ................................................................................................. 45 3.3.3 Transforming Structures and Processes ..................................................................... 48 3.3.4 Livelihood strategies and outcomes ........................................................................... 54 3.4 USEFULNESS OF THE SUSTAINABLE LIVELIHOODS APPROACH ............................................... 54 3.5 OIL AND ECONOMIC DEVELOPMENT: THE NEXUS ................................................................... 55 3.5.1 The Dutch disease ...................................................................................................... 57 3.5.2 Rent seeking................................................................................................................ 58 3.5.3 Patronage ................................................................................................................... 59 3.6 AVOIDING THE RESOURCE CURSE: THEORY AND PRACTICE ................................................... 59 4. GHANA – COUNTRY REVIEW ........................................................................................... 60 4.1 INTRODUCTION ...................................................................................................................... 60 4.2 POLITICAL OVERVIEW ........................................................................................................... 61 iv 4.3 ECONOMIC OVERVIEW .......................................................................................................... 63 4.3.1 The Ghanaian economy: Structure and performance ................................................ 63 4.4 STRATEGIES FOR POVERTY REDUCTION ................................................................................ 65 5. THE OIL AND GAS INDUSTRY IN GHANA ..................................................................... 70 5.1 INTRODUCTION ...................................................................................................................... 70 5.2 A BRIEF HISTORY OF OIL AND GAS EXPLORATION .................................................................. 70 5.2.1 The Great Discovery .................................................................................................. 71 5.3 AFRICA AND OIL RESOURCES ................................................................................................. 71 5.3.1 Ghana’s oil in the context of Africa’s oil boom ......................................................... 72 5.4 GHANA AND EXTRACTIVE INDUSTRIES ................................................................................... 75 5.4.1 The Fiscal Regime on mining ..................................................................................... 76 5.4.2 Challenges in the mining sector ................................................................................. 77 6. WHAT ARE THE EXPECTATIONS OF COMMUNITIES IN GHANA’S OIL DISCOVERY? .................................................................................................................................... 79 6.1 INTRODUCTION ...................................................................................................................... 79 6.2 HOW DO LOCAL PEOPLE PERCEIVE THE OIL INDUSTRY? .......................................................... 79 6.3 WHAT ARE THE EXPECTATIONS OF THE LOCAL PEOPLE? ........................................................ 82 6.3.1 Employment Opportunities ......................................................................................... 86 6.3.2 Provision of education and institution of scholarship schemes .................................. 87 6.3.3 Development of infrastructure .................................................................................... 88 6.3.4 Training programmes and setting up of micro credit schemes .................................. 89 7. FULFILLING LOCAL EXPECTATIONS ........................................................................... 90 7.1 INTRODUCTION