Lack of transparency impedes future oil investment

Lack of transparency in approving oil and gas deals has the tendency to affect future investment in the sector, an international energy security expert has told B&FT. “Lack of transparency or government not wanting to approve oil deals is impeding big oil exploration companies investing in the country, and this will make the country’s oil worthless and attract less revenue to the country,” said Robert Weiner, Professor of International Business, Public Policy and International Affairs at the George Washington University U.S.A, in an interview. He explained that KOSMOS Energy at one time had wanted to sell out its stake to Exxon Mobile but government refused that deal without any explanation; this decision by government had international implications concerning Ghana’s oil business. Kosmos in 2010, agreed to sell its 30.875 percent interest in The West Cape Three Points Block and its 18 percent stake in Deepwater Tano Block in the Gulf of Guinea to Exxon Mobile for around US$4billion. The government has written to Exxon Mobile about the deal, but has not gone beyond repeating the threat, said Reuters. “We're telling them that we prefer that they don't continue ... and if they do, we'll not approve of it,” the Ghana government said, according to the Reuters report. The Wall Street Journal in 2010 reported that government had blocked the deal -- something it has been threatening to do since -- and will only allow the state oil company to buy the stake. These were made known to B&FT on the sidelines of a two-day “Oil, Gas and Media Conference” organised by the International Press Institute (IPI). The conference is aimed at supporting free media and promoting greater transparency in the oil and gas sector and is being attended by more than 170 journalists from 27 countries The conference was officially opened with a statement from President Ilham Aliyev delivered by Ali Hasanov, State Counselor to the President of the Republic of Azerbaijan, and Natiq Aliyev, Minister of Industry and Energy for Azerbaijan. Mr. Aliyev observed that the international media has a lot of prejudice and misconceptions about international oil corporations. Anthony Mills, Deputy Director, IPI said: “Citizens have a right to be given accurate information about the oil and gas industry. “Press freedom issues in the oil sector are not limited to Third World countries, as reporters in nations such as the United States have also faced issues in coverage, particularly during the Gulf of Mexico oil-spill. “The Gulf oil-spill highlighted the need for press-freedom and how much reporters were not equipped.” In the lead-up to the conference, IPI had been heavily questioned over its decision to host the event in Azerbaijan -- a country widely criticised for its human rights and press-freedom records. The “Oil, Gas and Media Conference” is expected to focus on how investigative reporting can lead to big answers on how oil wealth is distributed, take a look at the oil industry in Baku, Azerbaijan, and examine how oil companies use social media to promote their image.