Ghana’s crude oil production has slumped to its lowest level in five years, a public oversight body said, warning that weak investment and regulatory bottlenecks are undermining the West African nation’s once-promising upstream sector.

Richard Ellimah, chairman of the technical sub-committee of the Public Interest and Accountability Committee (PIAC), said that the trend should serve as a “wake-up call” for the government to act decisively, the Ghana News Agency reports. 

“Recent developments in the operations of the petroleum sector indicate that Ghana must take a pre-emptive approach to increase activity in the industry and to attract investment,” Ellimah is quoted as saying. “This would signal commitment to attracting necessary capital for development.”

Slump in output

Ghana, which began commercial oil production in 2010 with the Jubilee field operated by Tullow Oil, had been hailed as one of Africa’s fastest-growing energy frontiers. But output from Jubilee and newer fields such as TEN and Sankofa has stagnated in recent years, falling far short of projections that the country would pump over 500,000 barrels per day (bpd).

According to PIAC, production in 2024 slipped to its weakest level since 2019, denting revenues for a government already grappling with debt and fiscal pressures. The watchdog said a lack of fresh investments and delays in approving exploration projects were deepening the decline.

Analysts say Ghana risks losing ground to rival African producers such as Namibia and Senegal, which are drawing major capital inflows from international oil companies despite global pressures to shift to renewables, the Ghana News Agency writes.

Calls for reforms

Ellimah stressed that ongoing revisions to the Petroleum Revenue Management Act (PRMA) and the Petroleum Exploration and Production Act (Act 919) were vital to create a “streamlined regulatory framework” that could make Ghana more competitive in the global energy market.

PIAC has urged parliament to push the Ministry of Energy and its agencies to step up efforts to secure new capital for the upstream industry. It also recommended that revenues from crude liftings by the Ghana National Petroleum Corporation (GNPC) be paid directly into the Petroleum Holding Fund, arguing that such liftings constitute indirect state participation.

“Government should expedite action to expand its gas infrastructure capacity to take up more raw gas. Government should determine specific programmes for implementation over the course of priority areas before selection of the priority areas,” Ellimah said.

He also called on the Ghana Revenue Authority, the Petroleum Commission, the Bank of Ghana and the Energy Ministry to collaborate in recovering outstanding surface rental arrears owed by companies operating in the sector.

Fiscal pressures

The watchdog further pressed for tighter scrutiny of GNPC’s spending, warning about rising costs at its TEN field relative to revenues. “Parliament should ensure that the Ministry of Finance complies with regulation eight of the L.I.2381 in setting the cap on the Ghana Stabilisation Fund (GSF),” Ellimah is quoted as saying.

Ghana, sub-Saharan Africa’s second-largest gold producer and a leading cocoa producer, has long hoped oil and gas revenues would help diversify its commodity-dependent economy. But falling output, debt distress and the government’s ongoing $3bn IMF programme have raised questions over how much the sector can contribute to stabilising public finances.

In June, Ghana reached an agreement with international oil companies to extend licences for its flagship offshore oil fields to 2040, unlocking up to $2bn in fresh investments aimed at boosting energy output and long-term economic growth.

Under a Memorandum of Understanding (MoU), the Government of Ghana, alongside partners Tullow Oil, Kosmos Energy, PetroSA, the Ghana National Petroleum Corporation (GNPC), and its exploration subsidiary Explorco, agreed to extend the West Cape Three Points (WCTP) and Deepwater Tano (DWT) licences, which cover the prolific Jubilee and TEN oil fields.