Ghana’s Public Interest and Accountability Committee (PIAC) has urged immediate action to address the ongoing decline in the country’s crude oil production.
PIAC, the oversight body tasked with monitoring the use of petroleum revenues, stressed the need for a multi-pronged strategy that prioritizes economic diversification, sustainable resource exploitation, the promotion of renewable energy, and the development of local industries.
According to the committee, this approach is critical if Ghana is to maintain a resilient economy while adapting to the global energy transition and sustaining growth in its upstream oil and gas sector.
Speaking at a consultative workshop in Accra on October 16, Mr. Constantine K.M. Kudzedi, a member of PIAC, noted that Ghana’s oil production has been on a consistent decline for four consecutive years. After peaking at 71.4 million barrels in 2019, production dropped to 66.9 million barrels in 2020 and has continued to fall, reaching 48.2 million barrels in 2023.
This sharp decline, driven by maturing oil fields and underinvestment in exploration, threatens the future of Ghana’s petroleum industry if new fields are not developed and substantial investments are not attracted.
Among the key factors contributing to the decline is the natural aging of Ghana’s flagship Jubilee oil field, which has been producing since 2010. Mr. Kudzedi explained that after 14 years, Jubilee has entered a phase of natural production decline.
The Tweneboa-Enyenra-Ntomme (TEN) and Sankofa Gye-Nyame (SGN) fields have also experienced similar drops in output. Without further investments to enhance production capacity, the country’s oil output will continue to suffer.
Another significant issue is the lack of new oil discoveries. Exploration activities have slowed considerably in recent years, largely due to the global shift away from fossil fuels and underinvestment by both the Ghanaian government and international oil companies. Technical and operational challenges, such as equipment malfunctions and delays in maintenance, have also compounded the production shortfall.
The global energy transition poses additional risks. As the world shifts its focus towards renewable energy, there is growing uncertainty surrounding the future demand for crude oil. This has led to reduced investor confidence in long-term oil projects in Ghana, further stifling exploration and production efforts.
The implications of this decline are severe. Ghana stands to lose significant revenue from its oil and gas sector, which could result in budget deficits that affect critical public services such as healthcare, education, and infrastructure development.
