Ghana’s crude oil production has been on a steep decline since peaking in 2019 with 73.44 million barrels. Since 2019, the sector has been unable to measure up to its high production expectations. For five consecutive years, production has reduced by more than 30%.
Although marginal, the reduction in Ghana’s crude oil production from 48.25 million in 2023 to 48.24 million in December 2024, undergirds the urgent need for players in the sector to up their game. The repeated dip in production levels should be of concern of Ghanaians, as Ghana work to fully leverage its natural resources for development.
More than before, Ghana needs to double down on its natural resources revenues, as the international monetary market remains closed for any competitive borrowing. Any leakage, coupling with our below par tax to GDP rate of 16%, could spell doom for our malleable economy.
Reportedly, Ghana owe GHC67 BILLION in contractor arrears. Currently, the new government’s decision to place moratorium on all payments and existing liabilities to contractors have provided a lease of relief to our economy. However, this is only temporal and artificial, as the payments resumes in the coming months. The need to fully optimise our hydro carbon resources cannot be overstated, then.
Since 2018, Ghana has not registered any new explorations/development. Coupling with this, the sector has also been beset by legal challenges, which has culminated in the exit of major players, including ExxonMobil. The only two active players, ENI and Tullow, are in arbitration with Ghana. Capping these challenges is the rather conflicting regulatory direction in Ghana’s upstream sector. The overstretching of petroleum revenues has also remained a major concern to players, including PIAC.
To steer the wheel towards progress, there is an urgent need for the government to prioritize exploratory activities by streamlining existing regulations that have served to stall development in the sector. Laws that are counterproductive to investor interest must be reversed to stem the downward trajectory in production.
Maybe it is time for the government to streamline its technology for monitoring and measuring production levels for optimal accounting and utility of our hydrocarbons. The need to strengthen the holds of accountability within the hydrocarbon sector cannot be overestimated, even as the government works to attract new investors. Because oil resources and reserves are non-replenishable, the need to safeguard what we produce through a robust monitoring mechanism cannot be overstated and all well-meaning Ghanaians should support such calls.
Samuel Osarfo Boateng
Researcher/Communications Consultant
Surfos7@gmail.com