Ghana’s petroleum sector faces contrasting realities as the 2026 fiscal year gets underway, with technical successes in the Jubilee Field providing a significant boost to production volumes even as a subdued international price environment threatens revenue expectations.
Kosmos Energy, the operator of the Jubilee Field, recently reported the successful drilling and completion of the J-74 well, the second producer in its 2025 to 2026 development programme. This new well is expected to add over 10,000 barrels of oil per day (bopd), raising Jubilee’s total output to nearly 70,000 bopd, an 18.6 percent increase from the 59,000 bopd averaged in late 2025.
The well encountered approximately 50 meters of net pay and has been completed in three zones, similar to the J-72 well which began producing in mid 2025. The Jubilee partnership, a consortium including Kosmos Energy, Tullow Oil, the Ghana National Petroleum Corporation (GNPC) and PetroSA, has approved five additional wells for 2026, comprising four producers and one injector, with drilling of the next producer already underway.
Despite this localized surge, the broader outlook for Ghana’s oil economy remains challenging. International market trends suggest that crude prices will remain largely subdued for the better part of the year, unless a dramatic geopolitical event occurs. This price stagnation is expected to dampen the government’s ambitious agenda to revive activity in the upstream sector.
At current price levels, the sector is not attractive enough for new investors to commit the fresh capital required for large scale exploration. As a result, the industry’s production decline, which saw national output drop from 71.44 million barrels in 2019 to 48.25 million barrels in 2024, risks extending into a sixth consecutive year.
“This downward trend signified not only a reduction in government revenue from a sector that continued to anchor the GDP, public finances, and foreign exchange earnings, but also a contraction in the value of opportunities and contracts available to Indigenous Ghanaian companies, the backbone of our local industry,” said John Abu Jinapor, Minister for Energy and Green Transition, commenting on the persistent decline in production and its broader economic implications.
The Minister spoke at the 2025 Local Content Conference and Exhibition in Takoradi, where he warned that without immediate action, the petroleum sector could face collapse within the next decade. He attributed the challenges to regulatory inefficiencies, protracted licensing processes, ambiguous policies, and a burdensome tax regime that has made Ghana less competitive compared to neighbors like Côte d’Ivoire.
The situation presents a unique challenge for economic managers. While existing partners continue to invest in new wells to increase volume, low global prices will ultimately act as a drag on the eventual revenue collected by the state. Consequently, 2026 is projected to be another year where oil GDP underperforms relative to non-oil GDP, continuing a trend that has seen the extractive sector’s economic contribution soften over the last half decade.
In late December 2025, the partnership received Government approval for license extensions covering the West Cape Three Points and Deep Water Tano Petroleum Agreements, which encompass the Jubilee and TEN fields. Subject to parliamentary ratification, these agreements will extend to 2040, and starting from July 2036, GNPC’s share in the fields will increase by a further 10 percent, with joint venture partners’ shares decreasing proportionally.
As part of the extension, the Jubilee plan of development has been amended to include up to 20 additional wells in the field. Kosmos Energy expects this will result in an increase in proven and probable (2P) reserves.
The TEN partnership has also agreed final sale and purchase terms to acquire the TEN floating production, storage and offloading (FPSO) vessel at the end of its current lease in 2027. Ownership transition to the partnership is expected to significantly reduce TEN operating costs and positively impact financial leverage in 2026.
However, there is a positive side to this market downturn for the general public. Low international crude prices are expected to result in lower prices at the pump for Ghanaian consumers, which could help ease transport costs and general inflation. The government will need to perform a delicate balancing act to maximize these benefits for the economy.
The relief from lower fuel costs could provide an opportunity for the state to stimulate the non-oil sector, helping to offset the fiscal shortfall caused by the decline in petroleum receipts. Meanwhile, the successful output from the J-74 well serves as a reminder of the sector’s remaining potential, even as it navigates a historically difficult global market.
Minister Jinapor has directed the Petroleum Commission to prepare an advisory paper on terminating inactive petroleum agreements, warning that no contractor or operator would be allowed to hold onto a block without fulfilling minimum work obligations. The Ministry has also established a Legislative Review Committee to assess the current legal, regulatory, fiscal and institutional framework of the upstream petroleum sector and recommend reforms necessary to make Ghana more competitive and investment friendly.
Victoria Emefa Hardcastle, Acting Chief Executive Officer of the Petroleum Commission, said the Commission is committed to revitalizing the upstream petroleum sector through innovation, investment attraction and strengthened local content participation. She disclosed that Tullow Oil and ENI have signed Memoranda of Intent with government to invest US$1.5 billion of additional investments in Ocean Thermal Conversion Plant (OCTP) and block 4 contract areas.
ENI, in particular, 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.
