President Mahama Blames Past Mismanagement for Oil Sector Setbacks, Pledges Renewed Stability and Investor Confidence
President John Mahama has sharply criticized what he described as a “toxic environment” created under the previous administration, which he claims precipitated a marked disinvestment in Ghana’s oil and gas sector and contributed to an average 7 percent annual decline in production.
Speaking at the Africa CEO Forum Annual Summit in Côte d’Ivoire, President Mahama pointed to protracted disputes and regulatory missteps that undermined investor relations and constrained upstream output.
“I think the environment got a bit toxic. I don’t know for what reason. The government didn’t seem to prioritize the sector,” he said. “They had constant squabbles with the oil investors.”
Among the notable disputes, President Mahama cited a case involving Talos Energy (TALO), in which a tax disagreement escalated into arbitration. “It was something they could have resolved. TALO went to arbitration and won before we came into office,” he noted. “We are now engaging with TALO to resolve the remaining issues. And that’s how it should be done.”
He also referenced a controversial unitisation dispute between Italian energy major Eni and a local partner, alleging that government alignment with the local firm triggered legal complexities and operational setbacks.
“ENI was held in contempt and had to move all their expatriate management to Côte d’Ivoire for several years. As a result, we saw production decline by about 7 percent annually,” President Mahama said.
Renewed Optimism and Sector Recovery
Despite the sector’s troubled recent history, President Mahama said conditions have since stabilized.
“Investor confidence has returned. New commitments are being made to produce more gas and oil. ENI are back and drilling again. Early signs indicate we may discover substantial quantities of oil and gas,” he stated.
President Mahama’s remarks reassure both domestic and international stakeholders amid efforts to revive the sector’s productivity and restore Ghana’s credibility as a reliable upstream investment destination.
Energy Sector Debt and Broader Reforms
Turning to broader energy sector challenges, President Mahama disclosed that his administration inherited debt obligations nearing $2.5 billion, owed to Independent Power Producers (IPPs), gas suppliers, and other entities.
“When we returned to office, we found a messy energy sector,” he said. “We’re working on renegotiating and restructuring the debt. We have strategies in place, and I’m confident that by the end of this year or early next year, we’ll be able to resolve the issue and satisfy all stakeholders.”
He underscored the need to address inefficiencies across the entire energy value chain, emphasizing that reforms must be holistic.
Macroeconomic Stability and Public Confidence
On the macroeconomic front, President Mahama said recent policy adjustments have yielded positive feedback from international partners, including the IMF. “During our last IMF review, we reached a staff-level agreement due to the adjustments we had made. That has helped boost business confidence,” he stated.
Asked whether the weight of public expectation was becoming burdensome, the president was measured saying, “It doesn’t keep me up at night – not yet,” he quipped. “The focus is on stabilizing the macro economy, building confidence, and attracting investment.”
“Fortunately, we’re still in what I call the honeymoon period. People are being patient and I’m hoping we can make enough progress before that patience wears thin,” he added.
