A member of Public Interest and Accountability Committee (PIAC), Mr Constantine K. M. Kudzedi, has warned that Ghana must act quickly to address the steady decline in crude oil production.
He revealed that since 2020, crude oil production had been declining by an average of 9.2 per cent annually, largely due to techÂnical and operational challenges in mature fields.
To address this, he said the government should adopt a multi-pronged strategy focused on ecoÂnomic diversification, sustainable exploitation of petroleum resourcÂes, and promotion of renewable energy.
Speaking at PIACâs Technical Consultative Workshop in Accra, he said local industries should be developed in addition to building a resilient economy that could adapt to the global energy transition.
âWe need urgent action from all stakeholders in terms of innovaÂtion and collaboration,â he said at the event dubbed âAddressing the declining crude oil production in Ghanaâ.
Speaking on the theme âOverÂview of crude oil production in Ghana: The journey so far,â he outlined the key challenges facing the sector and urged stakeholders to take swift action.
âGhanaâs oil production began in 2010 with the Jubilee field being a major contributor to the counÂtryâs oil output. However, after 14 years of production, Jubilee is now showing signs of natural decline, production peaked in the first nine years but has since been on a downÂward trend,â he explained.
Kudzedi, also a Law lecturer at the University of Cape Coast, said the Tweneboa-Enyenra-NtomÂme, (TEN) and Sankofa fields, which once boosted overall proÂduction, were also seeing similar declines.
This drop in production, he said, was largely due to technical issues like equipment malfunctions and maintenance delays, as well as infraÂstructure challenges.
He noted that infrastructure gaps, particularly in oil and gas processÂing, transport, and storage, had limited the countryâs production capacity.
He pointed to delayed projects like gas processing plant expansions as reasons for the slowdown in proÂduction, adding that global energy transition trends, shifting the world away from fossil fuels towards renewable energy, had created uncertainty for the future of crude oil demand.
This, in turn, he said, had made investors more hesitant to commit to long-term oil exploration projÂects in Ghana with ripple effect on the economy since oil was a major driver of the countryâs economic growth.
According to him, that could affect the governmentâs ability to fund essential services like healthÂcare, education, and infrastructure projects, which would slow ecoÂnomic growth and development.
Kudzedi said a decline in proÂduction could lead to international oil companies pulling out when projects become less commercially viable, leading to layoffs and fewer job opportunities.
He said both foreign and doÂmestic investors might begin to see Ghanaâs oil industry as a high-risk area, especially since more than two-thirds of the countryâs petroÂleum contracts were yet to lead to commercial discoveries.
âWith total production consisÂtently declining, investor confidence in Ghanaâs upstream oil sector is weakening and this could lead to the risk of âstranded assets,â where oil reserves and infrastructure become less valuable as the world moves towards renewable energy,â he stated.
He also said large institutional investors, including pension funds and sovereign wealth funds, were already shifting their focus from fossil fuels to green technologies due to environmental concerns and long-term risks.
Kudzedi added that renewÂable technologies had become more cost-effective, public policy increasingly supporting decarboniÂsation, making oil infrastructure less attractive for future investment.
He also pointed out that no new petroleum agreements had been signed since 2018, further limiting investment in the sector. With the global energy transition acceleratÂing, he stressed that Ghana must act quickly to fully exploit its oil resources before itâs too late.
A former Deputy Chief ExecuÂtive Officer of the Ghana National Petroleum Corporation, Dr ThomÂas Kofi Manu, who chaired the event urged industry players to look beyond the surface and explore new areas for investment.
He expressed concern over the current state of the industry, especially after the sector underÂwent restructuring and transparency measures were introduced.
The PIAC Chairperson, Emerita Prof. Elizabeth Ardayfio-Schandorf, was optimistic that the workshop would help tackle challenges facing the sector.
She stressed the need to critically examine how the country manages its oil resources, particularly as oil fields are naturally bound to decline over time.
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