Ghana to begin pumping oil

| Monday December 20, 2010 00:00

A consortium led by UK-based Tullow Oil hopes to produce 55, 000 barrels per day, increasing to 120, 000 barrels in six months.

Ghana, one of Africa's most stable countries, is expected to earn $400m (£254m) in the first year.

But laws meant to govern the oil sector have not yet been passed.

The discovery of oil off Ghana's coast has raised questions about whether Ghana can escape the 'resource curse', where discoveries of valuable commodities fuels conflict and corruption instead of funding development.

The oil is to start flowing following a ceremony attended by President John Atta Mills. Analysts have raised concerns about the lack of laws to manage oil revenue and the lack of an independent regulator for the sector.

The government has said it is working to get an oil bill passed.

The government has forecast that the oil will boost Ghana's economic growth rate from 5 percent this year to as much as 12 percent next year.

Production is eventually expected to bring in $1bn a year. Ghana already earns billions from cocoa and gold. The Jubilee Field is estimated to hold 1.5bn barrels of oil. A second offshore field was discovered in September that is believed to hold another 1.4bn barrels.

The fields are some of the largest oil deposits found in recent years.-(BBC)