Ghana’s oil sector has seen a serious decline over the past 8 to 10 years, with oil production falling by nearly 50%. Industry experts now refer to this period as the “lost decade.” This drop has been caused by falling investment, reduced drilling activity, and many missed opportunities.
To change this, the Ghana National Petroleum Corporation (GNPC), with strong support from the government, is putting together a plan to bring life back into the sector and attract new investors.
A Strong Start That Didn’t Last
Ghana discovered oil in large amounts in 2007 and started production by late 2010—one of the fastest timelines in the world. By 2017, Ghana was producing 160,700 barrels of oil per day from three major offshore fields: Jubilee and TEN, operated by Tullow Ghana, and Sankofa-Gye Nyame, operated by Eni.
Oil production peaked in 2019 at 195,750 barrels per day. Since then, production has dropped below 120,000 barrels per day, showing a clear need for urgent action to turn things around.
Drilling and Exploration Slowed Down
From 2008 to 2014, Ghana drilled an average of five oil wells per year. But between 2016 and 2022, that number fell to just one per year. Several reasons explain this sharp decline. Some license holders lacked the experience and resources to carry out drilling. In total, about US$1 billion in planned exploration activities did not happen. Experts say that if even one-third of these had been successful, they could have led to oil projects worth around US$10 billion.
The oil sector’s poor performance also hurt the economy. Ghana’s GDP (economic growth) that included oil was often lower than GDP without oil, showing how much the country lost from the sector’s decline.
Low global oil prices, problems in supply chains, and difficult financial terms in existing agreements also discouraged new investments. For example, many international companies lost interest in working in Ghana because the rules made it hard to make a good return on investment.
Ghana Fell Behind Other African Countries
While Ghana’s oil sector was slowing down, other African countries were moving forward. Côte d’Ivoire, Senegal, and several nations in East and Southern Africa increased their oil exploration and production. This shows that Ghana’s poor performance was not only due to global challenges but it was mainly due to a lack of strong commitment and action on Ghana’s part.
GNPC’s New Plan to Attract Investors
At the 8th African Energy Summit, Acting GNPC CEO Kwame Ntow Amoah explained that the problem isn’t with Ghana’s oil resources underground. Instead, it’s the rules and policies that scared investors away.
He said studies have shown that investors are more interested in countries that offer better financial deals and incentives. To fix this, GNPC is now working with the Petroleum Commission and the Ministry of Energy and Green Transition to introduce more investor-friendly policies. These include tax breaks, lower royalties, and profit-sharing options that make it easier for investors to earn good returns. The goal is to make Ghana’s oil sector more attractive and competitive again.
Signs of Recovery: New Deal Signed to Extend Oil Licences
These new efforts are already starting to show results. Earlier this month, the Government of Ghana, GNPC, Tullow Oil, Kosmos Energy, PetroSA, and Explorco (subsidiary of GNPC) signed a Memorandum of Understanding (MoU) to extend the licences for the West Cape Three Points (WCTP) and Deep Water Tano (DWT) blocks until 2040. These blocks include the Jubilee and TEN oil fields.
As part of the deal, up to 20 new wells will be drilled in the Jubilee field. This could bring in up to US$2 billion in investment and is expected to increase Ghana’s confirmed oil reserves significantly.
Looking Ahead: Ghana Plans to Boost Oil Output
Kwame Ntow Amoah, the acting CEO of GNPC, told The High Street Journal that the top priority now is to speed up exploration and production to stop the 50% drop in oil output seen over the past seven years. The goal is to stabilize production in the medium term and grow it in the long term.
Exploration and appraisal activities are expected to pick up starting in 2026 and peak over the next five years. If Ghana sticks to this plan, the country could become a leading oil producer in Africa once again.
