Oil Companies in Ghana Lay off Over 100 Workers due to Fall of Crude Price

Oil companies in Ghana have started laying off their workers to prevent loses due to fall in the price of crude on the world market. Crude oil on the world market has fallen to a record low of around $47 dollars and this is expected to affect the economies of the oil exporting countries especially those in the developing world. Ghana’s President, John Dramani Mahama said in January that the country will lose some $700 million oil revenue this year as a result of the falling price of crude on the world market. Ghana makes an average of $1.2 billion annually from crude oil production but the fallen price of the commodity on the world market has brought the expected revenue down to $500 million. Five major companies, Halliburton, Schlumberger, Stella Logistics, Baker Hughes, and Expo Gas have begun a retrenchment exercise seeing over hundred Ghanaian workers going home. The retrenchment started last month and is expected that more workers will be laid off this month. These companies are the ones working in the Jubilee Fields where Ghana’s oil rigs are located.

The companies issued a joint statement stating that it has issued notice to the General Transport, Petroleum and chemical workers union to begin negotiating with affected workers for their redundancy package. The General Transport, Petroleum and chemical workers union is responsible for maintaining the welfare of employees working with the oil companies. The Deputy General Secretary of the General Transport, Petroleum and Chemical Workers Union- Francis Sallah confirmed in an interview that they have officially received a retrenchment notice from the oil companies.  “Halliburton has served notice to lay off 5 Ghanaians, Schlumberger has written to us of 20 or 30, Stella Logistics says it is looking at cutting it total overheads cost by 25 percent, Baker Hughes is laying off around 20, and Expo 6 or 7”, he confirmed. He also added that the union is currently in talks with all the companies to arrive at acceptable redundancy package for all the affected workers. Some of the workers are said not to be happy with the decision and are likely to demonstrate this week against the decision.

Special Index project on corruption by the Institute of Economic Affairs of Ghana revealed last week that there is no transparency in the awarding and signing of contracts in the oil sector by the Ghanaian government. Ghana discovered its offshore oil and gas fields in 2007. By 2010, it had started pumping the first oil. Since then, oil has been produced in commercial quantities, and over the next 20 years, it could earn up to US$20 billion in export revenue for the country. It is expected that this will present an opportunity for the growth of the country’s economy but the picture has began to look different from what is expected. Quite a number of companies are scrambling to trade with Ghana in the oil sector. It is very difficult to verify their numbers due to restrictions on certain government documents, allowing them to continue to operate in the dark with the help of corrupt politicians.