In addition, PIAC has appealed to government to find solutions to challenges leading to a decline in oil production in Ghana.

PIAC in its first half 2025 report observed that Ghana is not attracting new investments into its upstream petroleum industry — with no new petroleum agreement signed since 2018.

 The committee observed that for period-by-period comparison, crude oil production declined by 25.92 percent, from 24,857,477.52 bbls in H1 2024 to 18,415,410.74 bbls in H1 2025.

The total petroleum receipts for the period decreased by 56 percent from US$840,765,265.80 in H1 2024 to US$370,343,681.17 in H1 2025, mainly due to relatively lower crude oil production and price.

“The Committee reiterates its call on the government, as a matter of urgency, to ensure that the Ministry of Energy and its allied agencies increase efforts to arrest the decline in crude oil production and secure investments into Ghana’s upstream petroleum industry” Vice Chairman of the Committee, Odeefuo Amoakwa Boadu VII said at a press engagement.

The Report also reviewed the performance of institutions with responsibilities under the PRMA, including PIAC itself. Its findings and recommendations are intended to guide policy formulation while promoting transparency and accountability in the management of Ghana’s petroleum resources.

Source: Joy Business

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This decline, coupled with other financial challenges, underscores the critical issues facing the country’s petroleum sector. Here are the key takeaways and the committee’s recommendations.

Crude Oil Production and Revenue

Ghana’s oil production peaked at 71 million barrels in 2019, but by 2023, output had fallen to 48 million barrels—a drop of 23 million barrels, or 32.5%.

This decline has naturally led to a decrease in revenue, with annual petroleum receipts falling from $1.4 billion in 2022 to $1.06 billion in 2023.

The $340 million shortfall is particularly painful given that Ghana’s next tranche of IMF support is just $360 million. Unless production stabilizes or oil prices rise, Ghana’s revenue will continue to shrink, straining the broader economy.

The Ghana National Petroleum Corporation (GNPC), which collects revenue from oil producers, experienced a 13.42% decline in its share of revenue, further squeezing its financial position.

Mismanagement of Petroleum Funds by the District Assemblies Common Fund (DACF)

The PIAC report highlighted discrepancies in how the District Assemblies Common Fund (DACF) utilized its petroleum funds. Contrary to the Petroleum Revenue Management Act, which mandates that 70% of such funds be spent on public investment, the DACF spent 53.75% on goods and services and only 46.25% on public investment.

The committee has urged the Ministry of Finance to enforce compliance with the law.

Disbursement to Priority Areas

The Ministry of Finance biennially selects priority areas for petroleum fund expenditure. Until 2025, these areas are Agriculture, Infrastructure in Education and Health, Road and Rail, and Industrialization. However, the report found that only 25% of the budgeted funds for industrialization were utilised.

For an emerging economy like Ghana, underfunding industrialization is a critical oversight that could hamper long-term growth.

Financial Strains on Ghana Gas

The report revealed that Ghana Gas has cumulative outstanding receivables amounting to $954.5 million, including legacy debts.

Additionally, Ghana Gas owes the GNPC $604 million for raw gas purchases.

Despite implementing the Cash Waterfall Mechanism to address these debts, Ghana Gas’s liabilities continue to grow, threatening its operational viability.

Recommendations

PIAC made several recommendations to address these issues:

• The government should invest in unexploited oil fields to boost production.
• The Ghana Revenue Authority (GRA) needs to intensify efforts to recover arrears.
• The Ministry of Finance should ensure that petroleum funds are used in accordance with the Petroleum Revenue Management Act.
• The Ministry of Finance should prioritize the Industrialization Priority Area in Annual Budget Funding Amount (ABFA) disbursements.

These recommendations are aimed at improving the management of petroleum revenues and ensuring the long-term sustainability of Ghana’s oil sector and its broader economy.

By following these measures, Ghana can hope to reverse its declining oil fortunes and better harness its petroleum resources for economic development.

However, the path forward requires diligent oversight and strategic investment to mitigate the risks identified by PIAC and secure a stable financial future for the nation.

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According to Fitch Solutions, this recovery is expected to be driven by Tullow Oil’s extensive drilling campaign at Jubilee and TEN.

However, a temporary plateau is foreseen after this surge until Pecan starts production, which is not expected until 2027 at the earliest.

“Our expectation for oil production remains bullish but contingent on Pecan reaching FID [Final Investment Decision] this year. Following operational setbacks in 2023 that led to a significant decline in production from the Jubilee and TEN fields, we project a rebound in oil production growth in 2024, with an anticipated increase of 5.0% to 177,120 barrels per day (b/d), it said.

“If Pecan’s FID is confirmed by the end of 2024, we foresee Ghana’s oil production reaching its peak at 238,980 b/d in 2029. This projection is cautious, considering the persistent historical delays in Pecan’s FID over the past three years. While drilling will pause in 2024, it is slated to resume and conclude in 2025, suggesting continued investment in and development of Ghana’s oil production capabilities”, it added.

Fitch Solutions continued that the complications experienced in the Jubilee and TEN fields in 2023 were particularly damaging, with production in the first half of the year dropping significantly compared to the same period in 2022 (12.0% at Jubilee and 17.5% in TEN).

“Issues such as flow assurance problems, reduced water injection, and temporary halts in well operations were to blame. Although these issues have since been resolved, they led to estimated declines of 9.5% in crude and condensate production 2023”, it mentioned. 

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