Ghana is taking firm steps to halt the decline in crude oil production, in what government describes as a renewed push to restore investor confidence and ensure the petroleum sector continues to support national development.
The Public Interest and Accountability Committee (PIAC) has through its reports shown that investment in Ghana’s upstream sector has stalled, with no new petroleum agreements signed since 2018. Crude oil output has fallen significantly and consistently.
Between 2019 and 2024, production dropped from 71.4 million barrels to 48.2 million barrels, representing a 32 percent decline. This has affected government revenue, foreign exchange earnings, and opportunities for local service companies operating in the sector.
Government believes the downward trend can be reversed and has announced measures to stimulate fresh investment and improve sector performance.
Enforcement of Work Obligations
The Minister for Energy and Green Transition, Dr. John Abu Jinapor, has directed that companies holding petroleum blocks must meet agreed work commitments or risk losing the licenses.
He stated that the Petroleum Commission has been instructed to prepare an advisory on the matter, and that government will not hesitate to terminate inactive agreements. According to him, Ghana’s natural resources must generate value for citizens, not sit idle under speculative control.
This measure is expected to free up dormant blocks and open the space for companies prepared to invest and progress exploration and production work.
Overhaul of Petroleum Legal and Fiscal Framework
Government is also undertaking a review of the legal and fiscal framework guiding petroleum operations. A Legislative Review Committee has been formed to examine the Petroleum (Exploration and Production) Act, 2016 (Act 919) and related policies.
The review will look at fiscal terms for frontier areas, including deep-water and the Eastern and Keta basins. The objective is to create a more predictable and competitive regime that encourages responsible investment while ensuring Ghana secures a fair share of benefits.
Dr. Jinapor noted that the revised framework must reward companies that take on high-risk exploration and deliver long-term value.
Strengthening Local Participation
Government aims to increase Ghanaian participation in exploration, field development, and support services. This involves promoting local content, expanding technical skills and enhancing domestic value retention across the petroleum value chain.
Acting Chief Executive Officer of the Petroleum Commission, Madam Victoria Emefa Hardcastle, said the Commission is pursuing a revitalisation strategy that focuses on improving regulatory efficiency, encouraging innovation, and positioning Ghana as a competitive energy market.
She expressed confidence that ongoing reforms will boost investor confidence and expand opportunities for indigenous companies.
Importance of the Reforms
The decline in oil output poses risks for public finances, export earnings, and employment. Local service companies, in particular, are feeling the impact as production activities slow down.
Reversing the decline would strengthen government revenue, support the cedi through improved foreign exchange inflows, and help sustain jobs and business growth within the sector.
Outlook
Government’s approach signals a shift toward more active oversight of petroleum assets and clearer rules for investors. If the measures are implemented effectively, they could unlock new exploration activity, advance stalled field developments, and stabilise production levels.
The initiatives are intended to protect national value from oil resources today while laying the ground for longer-term energy sector growth.
