US embassy cable - 05ACCRA553

C O N F I D E N T I A L ACCRA 000553 
 
SIPDIS 
 
 
TREASURY FOR ALEX SEVERENS, LUKAS KOHLER 
PASS TO MILLENNIUM CHALLENGE CORP WASHDC 
 
E.O. 12958: DECL: 03/17/2010 
TAGS: EFIN, ENRG, ETRD, KMCA, GH 
SUBJECT: AMBASSADOR AND NEW ENERGY MINISTER DISCUSS 
QUESTIONABLE OIL REFINERY DEAL 
 
REF: ACCRA 552 
 
Classified By: Ambassador Mary C. Yates for Reasons 1.5 (B and D) 
 
Summary 
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1. (C) During a March 14 courtesy call on new Energy Minister 
Mike Oquaye (see Reftel for readout) Ambassador Yates 
inquired about the GoG's recent agreement with "Arabian Gulf 
Oil Limited," purportedly from Bahrain, on a USD 2.8 billion 
oil refinery investment.  Oquaye was unable to give details, 
despite having signed the agreement himself.  End Summary. 
 
Oquaye Fails to Explain Murky Oil Refinery Deal 
--------------------------------------------- -- 
2. (C) The Ambassador inquired about local press reports that 
the GoG and Arabian Gulf Oil Limited (AGOL), of either 
Bahrain or Saudi Arabia, signed an agreement on March 10 for 
AGOL to build a new oil refinery in Ghana.  AGOL 
representatives announced to the press that they would invest 
roughly USD 2.8 billion (25 trillion cedis) in the refinery, 
which would refine 200,000 barrels of oil per day (almost 
five times TOR's capacity).  The refinery would be located in 
the free zone near Takoradi. 
 
3 (C) The Ambassador noted that searches on GOOGLE only 
turned up an Arabian Gulf Oil Company from Libya.  She also 
noted that it seemed strange that the first mention of this 
company was the deal signing, in comparison with other 
investors like Newmont Mining, who spend months laying the 
groundwork with the GoG, Parliament, and public before 
signing a deal.  Although Oquaye was pictured in the main 
dailies (Ghanaian Times and Daily Graphic) signing the deal, 
he responded that he did not have sufficient information 
about the deal and would have to look into it. 
 
Trade Minister Kyerematen's Perspective on the deal 
--------------------------------------------- ------ 
4. (C) The Ambassador also raised this during a March 16 
courtesy call with Trade Minister Kyerematen (readout 
septel), himself not a stranger to GoG deals with 
questionable private parties.  Kyerematen said he first heard 
of the oil refinery deal from articles in the papers.  He 
agreed it was strange there had been no prior news about what 
would be the largest ever foreign investment in Ghana.  He 
criticized the free zones for their failure to do due 
diligence on prospective investors, and assured Ambassador he 
would make inquiries about this deal with other cabinet 
Ministers, including Oquaye 
 
5. (C) Embassy will continue to inquire at various levels of 
government about the realities of this massive investment, 
and will also raise it with private sector contacts (CMS 
Energy, Chevron-Texaco) to get their take on this highly 
questionable deal. 
YATES 
 
 
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