Ghana’s oil production has declined by approximately 32 percent from 71.4 million barrels in 2019 to 48.2 million barrels in 2024, prompting Energy and Green Transition Minister John Abdulai Jinapor to warn that the petroleum sector could face collapse within the next decade without immediate corrective action.
Speaking at the opening of the 2025 Local Content Conference and Exhibition in Takoradi, Jinapor described the domestic petroleum industry as facing very serious and significant challenges. He noted that the sector’s value has fallen from about 1.35 billion US dollars in 2024, with projections showing a potential 50 percent loss this year if the decline persists.
The minister emphasized that this slowdown poses far reaching implications for fiscal stability and undermines Ghana’s ability to harness its hydrocarbon resources for industrial and socio-economic advancement. The decline signifies not only reduced government revenue from a sector that continues to anchor the GDP, public finances and foreign exchange earnings, but also a contraction in opportunities available to indigenous Ghanaian companies.
Jinapor attributed the challenges to regulatory inefficiencies, protracted licensing processes, ambiguous and inconsistent policies, and a burdensome tax regime that has collectively made Ghana less attractive to investors. He cited the failed 2018 licensing round when no petroleum agreements were concluded as evidence that such setbacks have eroded investor confidence and contributed to the exodus of major international oil companies such as ExxonMobil.
The minister questioned what Côte d’Ivoire is doing right that Ghana is not, noting that the neighboring country is fast overtaking Ghana in petroleum exploration. He urged conference participants to explore practical solutions to make Ghana competitive again.
Jinapor lamented the decline in business activity in Takoradi, once a hub for the oil and gas industry, saying the city looked quiet with empty hotels compared to years ago when it was booming with activity. He stressed that this demonstrates how deeply the sector’s decline is affecting livelihoods.
The Ministry of Energy and Green Transition has taken steps to end the cycle of repeated extensions, with Jinapor directing the Petroleum Commission to prepare an advisory paper to ensure no contractor or operator holds onto a block without fulfilling minimum work obligations. He assured that government will not hesitate to terminate inactive petroleum agreements to ensure resources are utilized productively.
The ministry has also established a Legislative Review Committee to assess the current legal, regulatory, fiscal and institutional framework of the upstream petroleum sector. The review aims to attract new exploration investments, encourage reinvestment by existing operators, and enhance recovery from producing fields, potentially including amendments to the Petroleum (Exploration and Production) Act, 2016.
Acting Chief Executive Officer of the Petroleum Commission Victoria Emeafa Hardcastle said the commission is committed to revitalizing the upstream petroleum sector through innovation, investment attraction and strengthened local content participation. She noted that despite considerable petroleum potential, the industry faces a crisis of confidence compounded by declining investments and the global energy transition.
Hardcastle disclosed that Tullow Oil and ENI have signed Memoranda of Intent with government to invest 1.5 billion US dollars in additional investments in Offshore Cape Three Points (OCTP) and block 4 contract areas. She pointed out that ENI plans to increase gas production from 240 million to 350 million standard cubic feet per day by 2028, a move expected to boost Ghana’s energy security and industrial growth.
To address operational and fiscal challenges, Hardcastle revealed that the commission is deepening collaboration with Ghana Revenue Authority (GRA), Bank of Ghana (BoG) and Ghana Investment Promotion Centre (GIPC) in finding lasting solutions to common industry bottlenecks.
The three day conference runs under the theme Revitalizing Ghana’s Petroleum Exploration and Production Sector: Driving Innovation and Redefining Local Content for a Competitive Energy Economy. Hardcastle expressed optimism that outcomes from the conference will drive practical reforms and renewed confidence in Ghana’s oil and gas sector, ultimately translating into increased participation of Ghanaian businesses in the value chain.
