Lecture Notes: Oil Discovery and Development

Introduction to Oil Discovery

• Location: Ulebri Well 1; traces of oil found in 1956
• Local Community: Ulebri community, similar experiences with oil discovery as with neighbors (e.g., Nembe people)
• Oil Issues: Potential for conflict and competition over resources

Economic Impact of Oil

• Stock Market Influence: Dow and oil prices hitting highs; oil prices reaching $92 per barrel
• Market Dynamics: Oil prices driven by supply concerns, such as pipeline sabotage in the Niger Delta
• Investment Risks: High risk but potentially high rewards in oil exploration

Notable Projects

• Cosmos Energy: Large investment in oil projects, high reward expectations
• Development Timeline: First oil planned for the second half of 2010 with a $11 billion development plan

Challenges in Oil Exploration

• Political and Social Issues: Greed and corruption concerns, potential for conflict over oil resources
• Corruption and Governance: Issues with Nigerian oil industry, government involvement
• Investor Concerns: Ensuring ethical practices and legal compliance (e.g., Foreign Corrupt Practices Act)

Cosmos Energy's Involvement in Ghana

• Leadership and Vision: Led by Jim Musselman, a charismatic and optimistic entrepreneur
• Community Engagement: Importance of gaining local and governmental support in Ghana
• Partnerships: Working with George Owusu to secure oil contracts

Economic and Political Context

• Norwegian Model: Suggestions to follow Norway's approach to oil revenue management
• Resource Curse: Risks of political and economic laziness due to abundant resources
• Importance of Proper Taxation and Investment in Development

Challenges with Government and Policy

• Contract and Negotiation Issues: Changes in Ghana's political landscape affecting oil deals
• Government's Role: Ensuring benefits for the nation, dealing with corruption
• Cosmos Energy's Legal Challenges: FCPA investigation and internal corporate changes

Market and Economic Conditions

• Oil Price Volatility: Impact on global markets and local economies
• Financial Crisis: 2008 financial crisis impacting investments and company strategies

Cultural and Societal Implications

• Community Impact: Oil affecting local communities, aspirations for prosperity
• Youth and Employment: Importance of job creation to prevent exploitation

Conclusion

• Outlook: Optimism for further oil discoveries and economic benefits
• Focus on Sustainability: Need for responsible resource management and long-term planning
• Importance of Reputation: Maintaining ethical standards and fostering positive global partnerships