By Eugene Davis
The Executive Director of the Africa Centre for Energy Policy (ACEP), Ben Boakye has asked government to sanitize its policies and decisions in the oil and gas sector in order give confidence to the existing investors in the country as well as court prospective ones.
ACEP, a think tank which was set up to contribute to development of alternative and innovative policy interventions through high quality research, analysis and advocacy in the energy and extractives sector in Africa, believes more has to be done if the country is to optimize its potential from the oil and gas sector.
Speaking with Business24/Investment Times on the margins of a training workshop for members of the Parliamentary Press Corps on ‘Breaking the Cycle of IMF Support: Addressing Governance Inefficiencies and Drivers of Public Debt in Ghana’, he said “We have oil blocks that are not being explored, nobody is sanctioning anybody and companies are sitting on the blocks and not working. Companies that are serious and wants to exploit our resources, they are being frustrated by government policy and decisions.
Meanwhile, government has been touring the world with the hope of enticing prospective investors but, “how can you frustrate those who are here and hope that someone else will come and that is what the policy failure has crystalised into, we are not getting investment to be able to increase oil production and take advantage of the windfall that is coming, if we are not lucky and the oil prices drop significantly then our revenue sources will crush, so it is critical for us; can you imagine losing US$500m from our oil receipts.” Mr. Boakye lamented.
In 2014, available statistics show that, the country was expected to generate about US$1.5bn in one year, and got less than 400m barrels because oil prices had declined sharply, “so the market is so uncertain that when the opportunity comes and you are not available to take it, it could punish you, so we really have to change our ways and begin to exploit and encourage investors those who are here to send signals for those who are not here for them to come.”
Ghana has signed eighteen petroleum agreements with various international and local oil companies since the early 2000s. Moreover, no new Petroleum Agreement (PA) was signed or ratified by parliament as of the end of December 2022. The total number of existing Petroleum Agreements remains at 14.
According to the Public Interest and Accountability Committee (PIAC), total production from Ghana’s three fields peaked in 2019 at an annual output of 71,439 barrels before commencing a decline to 66.9million barrels in 2020. Crude oil production further dropped to 55 million barrels in 2021 and then to 51.7 million barrels in 2022, representing 17.75 percent and 5.98 percent respectively.
However, the Committee in its report on the assessment of 10 years of petroleum revenue management in Ghana maintained that production will continuously decline if nothing is done through new in-fill developments on these existing fields or new fields coming on-stream.