Ghana’s 3 Oil Fields Record Cumulative 43% Reduction in Expenditure for H1 2024 Amid Cost Optimization Drive
Ghana’s oil production landscape marked a substantial pullback in expenditure across its three flagship fields in the first half of 2024, underscoring a strategic shift towards cost containment amidst ongoing market uncertainties.
According to the Public Interest and Accountability Committee’s (PIAC) 2024 Semi-Annual Report, spending across the Jubilee, TEN, and Sankofa-Gye Nyame (SGN) fields collectively dropped as operators refocused on efficiency.
Jubilee Field Cuts Expenditure by 23%
Total investment on the Jubilee field slid to $333.96 million in H1 2024, reflecting a 23% reduction from $435.33 million in the same period last year.
Production costs, encompassing essential outlays for business management, assurance, logistics, and subsea expenses, fell to $92.13 million, down from $121.84 million a year prior. Development costs also softened, amounting to $241.82 million versus $313.49 million in H1 2023.
These numbers reflect the field’s recalibrated approach to balance operational resilience with capital discipline, an emerging trend as Ghana’s oil sector confronts external cost pressures and price volatility.
TEN Field Expenditure Down by 14%
The TEN field followed suit with a marked drop in investment, posting a total outlay of $174.90 million in H1 2024, a 14% year-on-year decrease from $202.84 million.
Production costs dipped to $58.48 million, a considerable cut from $75.83 million in H1 2023, as the field trimmed spending on contractor costs, logistics, and management expenses.
Development expenditure, covering items such as FPSO (Floating Production Storage and Offloading) charters and development wells, reached $116.38 million, down from $126.70 million. A nominal $32,000 was allocated to exploratory studies for the period.
Sankofa-Gye Nyame Field Expenditure Contracts by 6%
At the SGN field, spending also trended downward, totaling $159.93 million in H1 2024, a 6% decrease from $171.16 million a year earlier.
Production costs for the field were recorded at $95.09 million, versus $104.74 million in H1 2023, with cost components covering FPSO operations and transport expenses.
Development expenditure reached $64.84 million, slightly down from $66.42 million. Key items included FPSO leasing expenses—a critical cost for field operators balancing capital requirements against a subdued oil market.
Strategic Tightening Amid Volatile Markets
The PIAC report’s findings align with an industry-wide push for operational tightening as Ghana’s oil sector adapts to persistently volatile prices.
The reallocation of capital towards cost-effective production, while trimming non-essential expenditure, reflects an approach likely to bolster resilience in Ghana’s upstream sector amid fluctuating demand and the ongoing imperative for energy transition.
While expenditure declines may pose short-term impacts on Ghana’s oil output, the broader picture is one of strategic recalibration, with operators leveraging efficiency gains to mitigate financial exposure.
