Ghana’s latest offshore oil discovery promises economic gains and greater energy security — but raises fresh concerns about delaying its clean energy transition and locking in long-term fossil fuel dependence
Writing by Samuel Ajala, editing by Sophie Davies
The Ghanaian government has confirmed the commercial viability of a new oil and gas discovery, which is expected to boost the country’s crude oil production.
A statement released recently by the Ministry of Energy and Green Transition described the development as a significant milestone in Ghana’s upstream petroleum sector.
This is said to mark the declaration of commerciality for discoveries within the Cape Three Points Block Four (CTP-B4), located offshore along Ghana’s western coast.
According to the press statement, “This declaration, submitted on 3rd July 2025, follows the successful completion of the Eban-Akoma Appraisal Programme pursuant to the Petroleum (Exploration and Production) Act, 2016 (Act 919) and the CTP-B4 Petroleum Agreement.
“The appraisal confirms the commercial viability of hydrocarbons discovered in the Eban-1X (oil) and Akoma-1X (gas and condensate) wells, paving the way for the development of new domestic energy sources.”
The Minister for Energy and Green Transition John Abdulai Jinapor described the declaration as a clear testament to the government’s commitment to the sustainable development of Ghana’s hydrocarbon resources. He said the declaration of commerciality for the Eban-Akoma discoveries is a major boost to our oil and gas sector.
“It highlights the immense potential of our offshore resources to fuel economic transformation, enhance energy security, and drive Ghana’s industrialization agenda. We commend the JV Partners and GNPC for their dedication to this strategic national asset,” he added.
Ghana made its first commercial oil discoveries in 2007 and began production in December 2010. The country currently has three main oil and gas fields in operation. As the country aims to boost its oil and gas production to balance energy demands and economic growth, it must also continue to make efforts to achieve its net zero plan.
In 2023, the Ghanaian government launched its Energy Transition and Investment Plan, marking the country’s commitment to a credible pathway in achieving net zero energy-related carbon emissions by 2060 through the deployment of low-carbon solutions.
With this new development, experts are concerned that new oil projects may result in long-lived infrastructure, such as platforms, pipelines, and refineries, thereby locking in carbon-intensive energy systems for decades. They are also concerned that rising oil revenues and focus could divert capital and political attention away from renewable energy projects, thereby slowing the energy transition.
Avoiding long-term dependence
Folix Ait, a Programs Officer at the Institute for Sustainable Energy and Environmental Solutions, told Gas Outlook that Ghana must adopt a dual-track energy development strategy, a model increasingly adopted by progressive oil-producing nations. He said this approach enables the development of oil and gas infrastructure in the short-term, while systematically mitigating the long-term risks of carbon lock-in through smart design, effective regulatory planning, and parallel investment in clean energy.
“All new fossil fuel developments should be required to undergo carbon risk assessments, with policy provisions for early decommissioning and transition planning. Countries such as Norway and the UAE offer useful lessons. Norway channels its oil revenues into a sovereign wealth fund that supports clean energy technologies, while the UAE uses its oil income to fund Masdar, a global leader in renewable energy.
“Denmark has gone further, announcing an end to new oil exploration licenses and committing fully to green energy by mid-century. Ghana can apply similar measures by ring-fencing a portion of its oil revenues into a dedicated Clean Energy Transition Fund. Doing so will ensure that fossil revenues serve as a bridge to a sustainable future, not a barrier,” he added.
Daniel Gyimah Yeboah, a National Service Person at the Ghana Atomic Energy Commission, told Gas Outlook that the country can navigate the fine balance between developing its oil infrastructure and maintaining its commitment to net zero by adopting a transitional strategy. He said natural gas is viewed as a transitional fuel in Ghana’s energy strategy, helping to reduce dependence on higher carbon-emitting sources, such as coal and diesel.
“By 2070, Ghana’s Energy Transition Framework calls for 21GW of renewable energy, with biomass, wind, and solar energy all playing significant roles. Accelerating these projects can help diversify the energy mix and lessen the reliance on fossil fuels.
“To balance fossil fuel development with a green energy transition, Ghana can introduce green finance incentives, reinforce net metering and support captive solar for businesses and homes, while securing oil revenues to fund renewable research and development and infrastructure,” he added.
Preventing a shift from renewables
Ait said that to ensure Ghana’s rising oil revenues do not divert political and financial focus away from renewable energy development, a set of strategic and institutional mechanisms must be adopted.
He said these should include establishing a dedicated Clean Energy Transition Fund, financed by a fixed percentage (e.g., 10–15%) of oil revenues, to support solar, wind, clean cooking, and energy efficiency initiatives — similar to Norway’s Oil Fund model.
“Additionally, the government should legally mandate a minimum annual budget allocation for clean cooking and renewable energy under frameworks like the Renewable Energy Act or Energy Transition Plan to guarantee consistent funding, regardless of oil market fluctuations. Moreover, an independent, multi-stakeholder oversight body should be created to monitor the alignment of oil revenue use with clean energy goals, ensuring transparency and public accountability through regular budget reviews and reporting.
“Furthermore, oil companies operating in Ghana must be required to invest a portion of their profits into local renewable energy or research and development as part of their licensing conditions, thereby linking fossil fuel activity directly to clean energy acceleration. Lastly, targeted fiscal incentives such as tax holidays, grants, or concessional loans should be offered to renewable energy developers to attract private-sector investment and reduce government financial burden.”
Yeboah also stated that Ghana is adopting a cohesive approach to energy policy by integrating oil and renewable development under its Ministry of Energy and Green Transition. He said that through its Renewable Energy Master Plan, the country aims to surpass 1,360 MW in non-hydro renewable capacity by 2030, with ongoing revisions that may double this goal, underscoring its long-term commitment to sustainable energy.
“Ghana has implemented key financial and policy tools including the 2022 Feed-in Tariff Scheme that secures long-term contracts for clean energy producers, a carbon pricing initiative launched in 2023 starting at $7/ton (rising to $20 by 2030) to discourage fossil fuel reliance, and $52.8 million secured from the Green Climate Fund to bolster climate-resilient energy infrastructure—all underscoring international and domestic commitment to sustainability,” he added.
Balancing act
Ait said that to balance the economic benefits of Ghana’s new oil discovery with its long-term energy transition agenda, the country must strategically channel oil revenues into accelerating clean energy development. He said that viewing oil not as a long-term energy solution, but as a temporary enabler to finance a just and inclusive transition, could be useful.
“A portion of oil proceeds should be ring-fenced for large-scale renewable energy infrastructure, grid modernization, clean cooking solutions, and energy storage systems. Simultaneously, Ghana should invest in skills development, climate-smart agriculture, local manufacturing, and innovation hubs that support green jobs and technology transfer.
“Leveraging oil-backed sovereign guarantees or blended finance models can also de-risk private investments in clean energy. By embedding these investments in a clear, time-bound transition strategy, Ghana can harness its petroleum windfall to build a resilient, diversified, and low-carbon energy economy, rather than risk delaying its net zero commitments.
“The true value of Ghana’s oil discovery will not be measured by barrels extracted, but by how boldly we invest its returns to power a cleaner, smarter, and more sustainable future,” he ended.
Source: gasoutlook.com
