Fresh Bursts in a Robust Sector

Ghana’s oil and gas sector has become one of the key drivers of its economic development, demonstrating significant evolution since the initial discovery of commercial oil reserves in the Jubilee fields in 2007. The country’s offshore landscape is defined by three primary oil and gas fields: Jubilee, Tweneboa Enyenra Ntomme (TEN), and Sankofa-Gye Nyame (SGN). While the sector has seen some fluctuations, recent developments and strategic initiatives underscore its ongoing potential.

In 2024, Ghana’s crude oil production reached 48.24 million barrels, a marginal decline of 0.01% from the 48.25 million barrels produced in 2023. This figure represents the closest the country has come to halting the consecutive decline in crude oil production observed since 2019. The Jubilee field remains the dominant contributor, accounting for approximately 66% of total national output, followed by SGN with 20% and TEN with 14%. Despite a general decline in annual production, the first half of 2024 showed early signals of improvement, with crude oil production increasing by 10.7% compared to the same period in 2023. This uptick was primarily driven by the coming on stream of new wells under the Jubilee South East (JSE) project.

A significant new development is the recent confirmation of commercial viability for oil and gas discoveries within the Cape Three Points Block Four (CTP-B4), specifically the Eban-1X oil discovery and the Akoma-1X gas and condensate find. The joint venture partners are now preparing a comprehensive development plan, which is expected to boost the country’s crude oil production outlook.

Ghana’s oil and gas landscape also includes 17 oil blocks and 179 oil wells, alongside a growing number of gas-producing assets. Natural gas production has also seen growth. In the first half of 2024, total gas production was approximately 139.87 billion standard cubic feet. The SGN field contributed 49% of this total, with Jubilee and TEN contributing 30% and 21% respectively. Total proven domestic natural gas reserves were estimated at 1.8 trillion standard cubic feet at the end of 2022. Furthermore, partners in the offshore Cape Three Points (OCTP) project have boosted gas processing capacity to 270 million standard cubic feet per day (MMSCFD).

Ghana’s midstream industry continues to face development challenges. The country’s primary oil refinery, Tema Oil Refinery (TOR), possesses an installed capacity of 45,000 barrels per stream per day. However, TOR has been largely dormant since 2019 due to a combination of poor infrastructure, substantial legacy debts, and inadequate crude supplies. Currently, TOR primarily functions by supporting importers of finished petroleum products with its storage facilities, which represent 44% of Ghana’s national storage capacity. It also remains the country’s sole producer of premix fuel and operates the largest LPG storage facility.

The operational challenges at TOR, coupled with its design limitations (it cannot refine Ghana’s light sweet crude, being designed for heavier crude), mean that Ghana heavily relies on refined fuel imports. In 2024, refined petroleum products, particularly diesel and petrol, constituted Ghana’s largest import expense, accounting for approximately 27% of the nation’s total import bill, valued at GH¢67.8 billion. The downstream sector remains robust in distribution, with 37 bulk distribution companies, 170 oil marketing companies, and 42 liquefied petroleum gas marketing companies facilitating the movement of petroleum products across the country.

The regulatory landscape governing Ghana’s petroleum sector is well-established, providing a structured environment for operations. The upstream sector, encompassing exploration and production, is primarily governed by the Petroleum (Exploration and Production) Act 2016 (Act 919). This legislation ensures that upstream activities are conducted safely and efficiently while maximising Ghana’s benefits from its petroleum resources. Oversight of the downstream industry, which includes refining, distribution, and marketing, falls under the purview of the National Petroleum Authority (NPA).

The Petroleum Hub Development Corporation project, approved by the government, presents transformative growth opportunities. The first phase of this ambitious project has been launched at an estimated cost of US$12 billion. The hub aims to establish a leading integrated petroleum complex, including a 300,000 barrels per day (bpd) refinery, petrochemical plants, extensive tank farms, jetties, and enhanced port infrastructure. This megaproject is projected to create approximately 780,000 direct and indirect jobs, increase Ghana’s GDP significantly and generate an estimated US$1.56 billion in export tax by 2030.

The rising population and increasing urbanisation in Ghana continue to drive rapid growth in the demand for domestic fuels and gas, creating a lucrative market for energy providers and investors. Additionally, there is a growing need for innovative alternative gas flaring solutions within the oil and gas industry. Investing in technologies and practices to minimise or eliminate gas flaring presents a significant opportunity for companies to enhance their environmental sustainability and operational efficiency while meeting evolving regulatory requirements.