After Years of Decline, Has Ghana’s Oil Industry Finally Turned the Corner?

Production is rising again after years of decline, but can fresh investment overcome ageing fields and mounting geopolitical risks?

Ghana’s upstream petroleum industry may finally be showing signs of recovery after nearly six years of declining crude oil production.

Presenting the 2026 Mid-Year Budget Review to Parliament, Finance Minister Dr. Cassiel Ato Forson announced that the oil and gas subsector had returned to positive growth, expanding by 7.0 per cent in the first quarter of 2026.

For an industry that has steadily lost production since reaching its historic peak in 2019, the announcement marks an important milestone.

But while government is celebrating the turnaround, the figures also reveal how far Ghana’s oil sector still has to climb before it returns to its former strength.

A Six-Year Slide

The numbers tell a sobering story.

In 2019, Ghana produced 71.4 million barrels of crude oil, the highest output since commercial production began.

Production has since fallen almost every year.

By 2025, annual output had dropped to just 36 million barrels, representing a decline of nearly 50 per cent.

The reasons were familiar across the industry. Mature oil fields naturally produced less over time, while delays in drilling new wells, reduced upstream investment and limited exploration meant production losses were not adequately replaced.

The decline came at a cost.

Lower production reduced export earnings, weakened petroleum revenues and limited one of Ghana’s most important sources of foreign exchange.

Government Bets on Investment

The Finance Minister believes the decline has now been arrested through deliberate policy intervention.

According to Dr. Forson, government has introduced investor-friendly reforms that have secured more than US$3.5 billion in fresh investment commitments from partners operating the Jubilee and Offshore Cape Three Points (OCTP) fields.

Those investments are expected to finance additional drilling and optimise production from Ghana’s existing oil assets.

“The reforms are already yielding results,” the Minister told Parliament.

Government has also amended key petroleum agreements to facilitate the drilling of at least 10 new wells, aimed at sustaining production rather than allowing mature fields to continue declining.

The Numbers Are Beginning to Improve

The first signs of recovery are already visible.

Between January and May 2026, Ghana produced approximately 17.1 million barrels of crude oil while exporting 86.1 billion standard cubic feet of natural gas.

Output has exceeded earlier projections across the country’s major producing fields.

At the Jubilee Field, daily production has increased from an expected 68,000 barrels to approximately 95,000 barrels per day, supported by four new production wells drilled this year.

Production at the Sankofa Field has also increased to about 28,000 barrels per day.

Natural gas production has risen from 245 million to approximately 282 million standard cubic feet per day, providing additional fuel for domestic electricity generation.

For government, these improvements demonstrate that renewed investment is translating into higher production.

Still Below Previous Highs

Despite the encouraging figures, Ghana’s petroleum industry remains well below the production levels achieved six years ago.

Even if production continues to improve throughout 2026, annual output is unlikely to approach the record volumes recorded in 2019.

Industry observers therefore see the current performance as the beginning of a recovery rather than a full return to peak production.

Maintaining the momentum will require continued investment, additional drilling programmes and successful exploration to replace declining reserves.

Gas Brings Immediate Benefits

The recovery extends beyond crude oil.

Government says increased domestic gas production is helping reduce electricity generation costs by replacing more expensive imported fuels.

According to Dr. Forson, the Gas-to-Power programme has already generated savings of approximately GH¢3.08 billion (US$268.5 million) during the first half of 2026.

Higher gas production also strengthens energy security while supporting industries that depend on reliable electricity.

Recovery Faces Global Risks

While government is optimistic about the sector’s revival, independent energy experts caution that global developments could quickly change the outlook.

In its assessment of the Mid-Year Budget Review, energy advisory firm C-NERGY noted that although elevated crude oil prices have strengthened Ghana’s petroleum revenues and export earnings this year, escalating geopolitical tensions arising from the United States-Israel conflict with Iran have introduced fresh uncertainty into global energy markets.

According to the firm, if the conflict persists or intensifies, Ghana could benefit from stronger short-term petroleum revenues as oil prices remain elevated.

However, C-NERGY warned that damage to refinery infrastructure in parts of the Middle East could disrupt supplies of refined petroleum products, forcing government to spend more on fuel subsidies to contain inflation and protect recent macroeconomic gains.

The firm further cautioned that prolonged geopolitical instability could eventually slow global economic growth, weaken energy demand and create downside risks for Ghana’s petroleum sector over the medium term.

Former Public Interest and Accountability Committee (PIAC) Chairman and Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr. Steve Manteaw, shares that concern.

“My first observation is the geopolitical developments. The American-Israeli war against Iran, which has resumed, will impact petroleum prices, which invariably will affect inflation. So we cannot be happy with the current trend,” he said.

His comments suggest that while Ghana’s upstream industry is showing signs of recovery, external developments remain capable of influencing petroleum revenues, fuel prices and the broader economy.

Looking Beyond Existing Fields

Government is also preparing for the next phase of Ghana’s petroleum industry.

Exploratory drilling in the Voltaian Basin is expected to begin later this year as authorities search for new commercial discoveries that could sustain production over the longer term.

The strategy combines increased investment in existing offshore assets with renewed exploration to secure Ghana’s future petroleum resources.

The Bottom Line

For the first time since 2019, Ghana’s petroleum sector appears to be moving in the right direction.

Fresh upstream investment, additional drilling and higher production have interrupted a six-year decline that saw national crude output fall by almost half.

But the recovery is still in its early stages.

Production remains well below previous highs, mature fields continue to require significant investment and global geopolitical tensions threaten to inject fresh uncertainty into energy markets.

Whether 2026 marks the beginning of a sustained resurgence or simply a temporary rebound will depend not only on what happens in Ghana’s offshore fields, but also on events unfolding far beyond its shores.