Dai Jones, the President and General Manager of Tullow Oil Ghana, has resigned to make way for the company’s Executive Chairman, Charles Darku, to take over as Chief Executive in mid-August, the company announced in Accra?on Tuesday.
Tullow said the move was aimed at giving opportunities to locals to take charge of the company.
But sources have pointed to the months of power struggle within the company that has led to the departure of Jones to Tullow’s London office.
They said that Jones and Darku had been pulling in different directions since before last December’s presidential and parliamentary elections in Ghana when both men supported different parties. Tullow Ghana, according to the sources, apparently hedged its bet in the run-up to the poll by financially supporting the then governing New Patriotic Party (NPP) and the then opposition National Democratic Congress (NDC).
The NDC was eventually declared winner by the Electoral Commission of Ghana but this is being legally challenged by the NPP.
It is not clear whether the political uncertainty has a direct bearing on the shake-up at Tullow Ghana. However, this development will certainly not go down well with the parent company, Tullow Oil, the London-based multinational oil and gas company, which is embroiled in litigation against the Ugandan government over the payments of taxes.
Tullow Ghana is Tullow Oil’s flagship operation in Africa, where is it also involved in Uganda and Kenya. The company has come in for criticism in these two countries for overestimating production figures, which were then used by these governments to plan their budgets, which had to be revised downwards.
This was the same situation in Ghana where low productivity from the firm’s flagship Jubilee project led to a drop in revenues for the government. According to a Ghanaian think tank, IMANI Centre for Policy and Education, in Q1 of 2012 the total government revenue came to less than US$60 million and projected total revenues for 2012 should come to less than US$240 million. “Because the government budgeted for oil revenue of more than US$650 million, the shortfall in the budget is correspondingly more than US$410 million,” stated IMANI, “The 2012 shortfall is nearly three times more than the 2011 oil-related budget shortfall of about US$140 million.”
The think tank also added that the government also budgeted to receive US$200 million in corporate taxes from the oil companies, but reports indicate that these firms are in no position to pay. Despite Tullow attributing the drop in productivity to “sand contamination of the flow lines that carry the oil from the underwater wells into the storage facilities on the sea surface”, IMANI claims that there are too few wells in production and that the rush to commence production has resulted in shortcuts being taken.
Despite these shortcomings, there is no doubt, say the sources, that Tullow Ghana has an excellent public relations team and corporate social responsibility record in the country.