Ghana’s upstream petroleum industry faces a critical inflection point, with the Public Interest and Accountability Committee (PIAC) sounding alarm bells over a prolonged investment drought that threatens future oil production and government revenue.
In its review of the 2024 Petroleum Sector Report, PIAC revealed that Ghana has not signed a single petroleum agreement since 2018 marking more than half a decade without new exploration or production contracts. This stagnation, the committee warns, poses significant long-term economic risks.
“The most significant recommendation we have made is for the government to do everything it can to encourage investment into the upstream petroleum industry. For the past five years, there have been no new agreements between the government and petroleum companies. Without fresh investments, production levels are likely to decline and that directly impacts government revenue,” Richard Ellimah, a PIAC member representing civil society organisations, noted.
Speaking during a stakeholder engagement in Kumasi, Ellimah stressed that in Ghana’s current economic climate, the country cannot afford to miss out on vital petroleum revenues that could support national development.
To reverse this downward trend, PIAC is urging government to revive international investment promotion efforts and re-engage major global oil and gas firms.
“In the past, government officials travelled the world promoting Ghana’s upstream sector. We need to revive those efforts and engage with key players to bring them into our market, increasing investments will ultimately lead to higher production and more revenue for national development,” Ellimah said.
Gas Flaring: Environmental and Economic Toll
Beyond investment concerns, PIAC also flagged gas flaring as a persistent issue undermining both environmental and economic sustainability. Although Ghana has a regulatory zero-flaring policy, limited processing capacity has resulted in ongoing flaring of associated gas, particularly at the Atuabo Gas Processing Plant.
“Technically, no company is allowed by the Environmental Protection Agency (EPA) to flare gas. However, because the Atuabo Gas Processing Plant cannot handle all the associated gas produced, excess gas is often flared. This is harmful to the environment and a waste of valuable resources,” Ellimah explained.
In a move that PIAC considers a step in the right direction, the government recently announced Cabinet approval for the construction of a second gas processing plant (GPPII). The new facility is expected to significantly curb flaring and transform surplus gas into usable energy.
“It was heartening to hear the minister confirm Cabinet’s approval. This project should be treated as a national priority. If construction begins quickly, Ghana could begin benefiting from its excess gas within the next two to three years. While it is a complex and capital-intensive project, it is necessary for environmental sustainability and economic growth,” Ellimah added.
