The Africa Centre for Energy Policy (ACEP) has raised fresh concerns about the management of Ghana’s upstream petroleum sector, alleging that several oil exploration companies are holding on to dormant oil blocks through politically granted extensions that violate the terms of their Petroleum Agreements (PAs).
Presenting findings during a policy engagement organised by the Natural Resource Governance Institute (NRGI), ACEP’s Executive Director, Mr Ben Boakye, said most of Ghana’s contracted oil blocks have seen little to no meaningful exploration activity, despite generous fiscal incentives and multiple extensions granted over the years.
Out of 13 oil blocks awarded to companies, Boakye said only a handful have attempted any serious exploration work. “Of the 13 blocks, there are only three that actually moved to drill,” he noted, referencing ENI and AGM, which initially committed to drilling but later failed to proceed even after being offered additional incentives.
He added that Springfield Exploration drilled one well, a move that has since become controversial due to disputes surrounding its results and commercial viability. Beyond these cases, Boakye said the remaining companies have largely sat on their acreage without progressing exploration.
According to ACEP, the problem lies not just with company inaction, but with how extensions are being granted. Boakye alleged that rather than following the strict procedures laid out in Petroleum Agreements, some companies simply approach the sector minister directly to request more time.
“What happens is that you go and see a minister and say, ‘I couldn’t do the work, extend it for me,’ and they grant the extension,” Boakye stated. “That is completely contrary to what the Petroleum Agreement actually stipulates.”
He explained that under Ghana’s petroleum contracts, exploration periods are governed by clear timelines and financial obligations. Before a company can be granted an extension beyond its initial exploration phase, it is required to account for and spend the budgeted work programme or pay the unspent balance to the Ghana National Petroleum Corporation (GNPC).
“In every agreement, we have timelines. There is even provision for a first extension,” he said. “But if you don’t spend the amount you committed to, you are supposed to pay the balance to GNPC before you are granted that extension.”
Boakye alleged that in practice, these financial conditions are often ignored. “They don’t pay, but they still get the extensions,” he said, describing the process as politically driven rather than contractually grounded.
ACEP warned that such arrangements have yielded no tangible progress in expanding Ghana’s oil reserves, while effectively locking up valuable national resources in inactive concessions. “There is nothing progressive about these arrangements,” Boakye said, adding that the situation undermines investor discipline, regulatory credibility and long-term sector development.
The policy think tank argues that allowing companies to hold acreage indefinitely without exploration delays new entrants who may be better positioned to invest, drill and deliver production. It also weakens Ghana’s bargaining power at a time when global capital for fossil fuel exploration is becoming increasingly selective.
ACEP is calling for stricter enforcement of Petroleum Agreements, greater transparency in extension approvals and a depoliticisation of decision-making in the upstream sector. According to the organisation, restoring credibility to Ghana’s petroleum governance framework is essential if the country is to attract serious investors and maximise value from its remaining hydrocarbon resources.
The concerns come amid broader debates about declining exploration activity in Ghana’s upstream oil sector and the need for stronger institutional discipline to protect national interests in the management of natural resources.
