Ghana’s oil sector faces uncertainty as production drops and revenue gaps widen
Ghana’s oil sector is facing mounting challenges as production continues to slide for the fifth year in a row. In 2024, the country pumped just 48.25 million barrels of crude oil, significantly lower than the 71.44 million barrels recorded in 2019. The stark figures were revealed in the 2024 Annual Report of the Public Interest and Accountability Committee (PIAC), sparking renewed concern about the sustainability of Ghana’s upstream petroleum sector.
While the year-on-year decline for 2024 was just 0.01 percent, PIAC noted that overall, production has been shrinking at an average rate of 7.4 percent each year since 2019. The Jubilee Field continues to lead output, contributing 66 percent of the total, followed by SGN at 20 percent and TEN at 14 percent.
But dwindling production is just one part of the story.
The report raises red flags about how oil revenues are being managed. One of the most troubling findings is that over 145 million dollars earned by GNPC’s commercial arm, Explorco, was not deposited into the Petroleum Holding Fund (PHF), even though this goes against the rules set by the Petroleum Revenue Management Act (PRMA). This unaccounted-for revenue adds to a larger backlog of nearly 489 million dollars in funds that should have gone into the state’s petroleum accounts but didn’t.
GNPC argues that Explorco’s earnings do not fall under the PHF requirements, but PIAC disagrees, stressing that these are public funds and must be properly tracked and managed. The committee is once again calling on Parliament to step in and ensure strict adherence to the law.
The report also uncovers ongoing lapses in revenue collection. Some international oil companies operating in Ghana still owe surface rental fees, amounting to nearly 2.9 million dollars. PIAC says that a chunk of these unpaid fees are linked to companies whose contracts were terminated back in 2021, raising serious concerns about enforcement and recovery efforts.
Yet, despite all the challenges, Ghana saw an uptick in oil earnings. Total petroleum receipts rose by 27.8 percent, from 1.06 billion dollars in 2023 to 1.36 billion dollars in 2024. This jump is largely thanks to higher crude prices on the global market, not increased output.
However, the good news ends there. Ghana failed to sign any new petroleum agreements in 2024, the fifth year this has happened, despite efforts by the Ministry of Energy to bring in new investors. On top of that, there were no allocations from the Annual Budget Funding Amount (ABFA) toward industrialization, even though that is supposed to be a government priority.
PIAC’s report wraps up with a firm message, Ghana’s oil sector urgently needs stronger coordination between key institutions like the Ghana Revenue Authority, Petroleum Commission, and the Bank of Ghana. Better enforcement, more transparency, and a commitment to the law are needed to protect the country’s oil wealth and secure its economic future.
By: Linda Akite
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