Adnan Adams Mohammed
The new President John Mahama administration has been urged to take critical steps to ensure comprehensive regulatory reforms in Ghana’s upstream petroleum sector.
According to an Alliance of Civil Society Organizations, the reforms are needed to attract significant investment and revitalize the industry.
They argue that the current government’s ability to address policy inconsistencies and foster a predictable regulatory environment will help reverse the steady decline in domestic crude oil production and create a more dynamic sector.
“Over the past 3-4 years, we have witnessed a decline in upstream petroleum production. Exploration activities are almost nonexistent, and one of the primary issues is policy and regulatory uncertainty within the sector”, Nana Amoasi VII, Executive Director of the Institute for Energy Security, representing the alliance said at a press briefing last week. “We are urging the government to ensure consistency and coherence in policies to instill confidence among existing and potential investors. A stable policy environment is critical for securing long-term investments.”
According to the 2024 Ghana’s Upstream Petroleum Business Outlook Report, without rigorous reforms, the sector could lose up to US$2 billion in investment in 2025.
It was projected in the report that investments in Ghana’s upstream petroleum sector in 2024 would be around US$1.0 billion, which is a 40% decrease from the previous year.
The sector faced challenges such as low crude oil production, political interference, and environmental concerns.
Nana Amoasi VII also emphasized the need to strengthen the integration between the upstream and downstream petroleum sectors, advocating for the prioritization of crude oil allocation to local refineries.
“There needs to be synergy between the upstream and downstream sectors. Our petroleum agreements stipulate that crude oil from domestic fields should be prioritized for local refineries, yet this is not being enforced. We are urging the government to uphold these agreements and regulations to enhance domestic processing capacity,” he added.
The proposed reforms aim to create a favorable investment climate while bolstering Ghana’s refining capabilities, ensuring that the country maximizes the economic benefits of its petroleum resources.
Ghana’s dwindling upstream petroleum sector investment comes at a time investors are pulling out of fossil fuel financing due to environmental concerns.
