Is Opec Good for Ghana
What Ghana has to know before it decides to become a member of the Organization of Petroleum Exporting Countries (OPEC)
Image via Wikipedia
By 2010/2011 Ghana will join the list of nations producing the much converted nature’s gift to Africa and the world at large, ‘Crude Oil’. This is regardless of its crude quantity per-day.
Though various issues have sprung up, an important aspect being overlooked is whether the Organization of Petroleum Exporting Countries (OPEC) is of benefit to Ghana. What does OPEC do? Simple! It basically tries or influences the price of crude oil globally. It is a force to reckon in the petroleum industry.
Currently OPEC has 12 members namely, Saudi Arabia, Libya, Kuwait, Iran, Iraq, Nigeria, Angola United Arab Emirates,Venezuela, Qatar, and Indonesia. OPEC was formed by Venezuela during the oil boom of the 1960s.
However its correct share reserves are not correctly known since from time of inception in the 1960s oil reserves increased from 67% -70% by 1993 and declined to 40% in the early 1990s.
Ghana Outside OPEC
Being a small nation, Ghana cannot dictate the global crude oil prices alone. Thinking this way would only bring fringe benefits to Ghana. While its influence on the globally oil market would also be less than a fraction of whatever price oil would be by 2010-2011.
Ghana In OPEC
By joining OPEC, Ghana would lead its interest protected rising from its oil production. The organization will increase its development assistance to Ghana; this will lead to subsidy/ reduce oil revenue reduction that usually follows production cuts. This is the type of quota mechanism OPEC members derive benefits from.
What Ghana Should Watch Out For
Despite the benefits, it is important for Ghana in the global oil market/ industry. This also includes the murky international politics synonymous with the oil industry.
OPEC has its own issues, reserves has not been stable in many members nations. The industry is rapidly changing and very capital intensive, this leads to the problem debt OPEC members owe foreign multi-nationals.
Liked it
