Ghana’s crude oil production increased by 10.7% year-on-year in the first half of 2024, marking a reversal of a five-year decline, according to the country’s Public Interest and Accountability Committee (PIAC).
After peaking in 2010, Ghana’s oil output had steadily dropped, reaching a five-year low in 2023 due to reduced production in existing fields, which offset the gains from new wells, Reuters reported.
However, PIAC’s report revealed that crude oil production rose to 24.86 million barrels by June 2024, compared to a 13.2% decrease during the same period in 2023.
This growth was primarily driven by the Jubilee South East (JSE) project, operated by Tullow Oil, which started production in late 2023. The JSE is part of the Jubilee field, Ghana’s first oil discovery, which had seen output declines in recent years.
Additionally, Ghana’s petroleum revenue surged by 56% year-on-year, reaching $840.8 million by June, thanks to the increased oil output. The country relies on petroleum for about 7% of its government revenue, according to PIAC.
Gas production also saw a 7.5% rise, reaching 139.86 million standard cubic feet by June.
Challenges in the petroleum sector
Despite the positive production figures, Dwamena, a PIAC official, highlighted challenges in Ghana’s petroleum sector, including both technical and natural issues.
The country’s laws require petroleum companies to allocate at least 12% of every project to the state as free and carried interest, a cost that can be prohibitive for investors. “The state can take 15%, 20% carried interest depending on negotiations, and that has been a disincentive,” Dwamena explained.
To boost future production, Ghana plans to sell more exploration rights, ensuring that fossil fuels do not remain untapped and generating additional revenue to support its energy transition. Current oil companies operating in Ghana include Eni, Tullow, Kosmos, and PetroSA.
In August, Ghanaian President Nana Akufo-Addo launched the construction of a $12 billion oil refinery with a capacity of 300,000 barrels per day.
West Africa consumes around 800,000 barrels of oil daily, with almost 90% of this demand being met through imports. Ghana’s petroleum hub project aims to help meet the region’s growing demand for refined oil products and by-products by 2036.
