Decline in oil production threatens survival of oil companies in Ghana – PIAC warns
The Public Interest and Accountability Committee (PIAC) has highlighted the significant challenges facing Ghana’s oil production, with a marked decline in output over the past four years. This has direct implications for government revenue, economic growth, and investment in critical sectors such as healthcare, education, and infrastructure. The decline in production has been attributed to mature oil fields, underinvestment in exploration, technical challenges, and the global shift towards renewable energy.
PIAC’s member, Constantine K.M. Kudzedi, pointed out that Ghana’s peak oil production occurred in 2019, with 71.4 million barrels, but has since steadily decreased, with just over 48 million barrels produced in 2023. The Jubilee Field, a flagship oil field that began production in 2010, and the TEN and Sankofa Gye-Nyame Fields, have all experienced natural production declines due to aging and underinvestment.
The global energy transition away from fossil fuels further complicates the situation, as it diminishes investor interest in long-term oil projects, leading to reduced investments and potentially stranded assets. Kudzedi warned that without new discoveries or enhanced investments, the sustainability of Ghana’s upstream petroleum industry is at risk, threatening jobs, investor confidence, and overall economic stability.
In addition to these economic concerns, infrastructure limitations, such as delays in processing and transport projects, exacerbate production issues. The decline in oil production could lead to increased unemployment in the oil sector and related industries, while deterring further foreign and domestic investment, ultimately hampering the growth of Ghana’s petroleum sector.