- Ghana Targets Five New Petroleum Deals by 2027 as Falling Oil Output Raises Urgency for Exploration
Ghana is seeking to conclude at least five new petroleum agreements by the end of 2027 as policymakers intensify efforts to reverse a multi-year decline in crude oil production that threatens export earnings, government revenue and the country’s long-term position as an upstream petroleum producer.
The Petroleum Commission is engaging prospective investors and existing industry participants to unlock new exploration acreage, with several agreements expected to move through the approval process in the coming months.
The push represents one of Ghana’s most consequential attempts in recent years to rebuild its upstream investment pipeline after a prolonged period in which producing fields have matured faster than new discoveries have been brought into development.
More than 15 years after commercial production began at the Jubilee Field in December 2010, Ghana’s petroleum industry has reached a more difficult stage of its development. Output has fallen materially from earlier highs approaching 170,000 to 180,000 barrels per day, increasing pressure on government and regulators to attract fresh capital into exploration.
Petroleum Commission Chief Executive Officer Emeafa Hardcastle said the regulator was working with industry participants to bring new agreements into the sector. “It is anticipated, and with the support of our minister, that at least five new petroleum agreements will be signed between this year and next year,” she said.
The Commission is also seeking to deepen Ghanaian participation in exploration and production rather than allowing indigenous companies to remain concentrated mainly in oilfield services. “We are particularly excited to announce that the Frontier Offshore Keta Basin will now be open for exploration by Ghanaian operators,” Ms Hardcastle said.
Opening frontier acreage to domestic operators could mark an important shift in Ghana’s local-content strategy. Indigenous participation has expanded over the years across logistics, engineering, catering and other support services, but the capital-intensive exploration and production segment continues to be dominated by international companies with larger balance sheets and greater technical capacity.
The opportunity for local companies is therefore significant, but so is the financing challenge. Exploration requires substantial upfront capital with no guarantee of a commercially viable discovery, forcing investors to weigh geological prospects against fiscal terms, regulatory stability, approval timelines and the long-term outlook for global petroleum demand.
Ghana is also competing for capital against established and emerging oil provinces across Africa, Latin America and elsewhere. That competition is becoming more intense as the global energy transition reshapes investment decisions and reduces the amount of capital available for higher-risk frontier exploration.
Minister for Energy and Green Transition Dr John Abdulai Jinapor said Ghana would not treat petroleum development and renewable energy as mutually exclusive priorities. “We’ll be pragmatic and we will be guided by our national circumstances,” he said at the launch of activities marking the Petroleum Commission’s 15th anniversary.
“We will not abandon resources that can support our development, neither will we ignore the fundamental changes taking place in the global energy landscape,” Dr Jinapor said. “We will therefore maximise our petroleum resources whilst promoting renewable energy to complement that. And our main vision is what we call the gas-to-power era.”
That position reflects the difficult policy calculation facing many African hydrocarbon producers. Developed economies are moving more aggressively towards decarbonisation, while investors and financial institutions are placing greater emphasis on climate risk, but countries such as Ghana still require reliable and affordable energy to support industrialisation and economic growth.
The five proposed petroleum agreements therefore carry strategic significance beyond simply increasing the number of operators. Ghana needs exploration activity today if it is to generate replacement production several years from now, because even after an agreement is signed companies must conduct geological studies, seismic surveys and exploratory drilling before a discovery can be commercially evaluated.
A successful discovery must then be appraised, financed and developed before production begins, a process that can take several years. The current push therefore comes against a narrowing investment window in which delays to exploration today could translate into a deeper production decline later in the decade.
Regulatory efficiency will be equally important. The Petroleum Commission says its scrutiny of upstream development plans has generated substantial savings for Ghana, with Ms Hardcastle indicating that reviews of Plans of Development have saved the state approximately US$2 billion.
The challenge is to combine that fiscal discipline with sufficiently predictable and competitive terms to attract new exploration capital. A regulatory system that protects the state from excessive costs but creates prolonged uncertainty around approvals could ultimately weaken the investment pipeline it is trying to rebuild.
The decline in petroleum production also has wider macroeconomic consequences. Lower output can reduce petroleum receipts to the state and weaken export earnings, while declining domestic gas supply could create additional pressure for the energy sector if replacement resources are not developed.
That makes the government’s proposed gas-to-power strategy particularly important. Natural gas can provide a bridge between Ghana’s petroleum industry and its longer-term energy transition by supporting thermal generation while renewable capacity expands, but the strategy ultimately depends on discovering and developing sufficient domestic gas resources.
The success of the renewed exploration drive will therefore not be measured simply by whether five agreements are signed. The more meaningful indicators will be committed exploration expenditure, seismic work, wells drilled, commercially viable discoveries and the speed at which any new resources move towards production.
After 15 years as an oil-producing economy, Ghana has entered a period in which maintaining that status can no longer be taken for granted. The next round of petroleum agreements could determine whether the country begins a fresh upstream investment cycle or continues managing the decline of discoveries made during the previous one.
