Ghana Should Not Attract New Upstream Petroleum Investments – 2025 PIAC Semi‑Annual Report

Introduction

The 2025 Semi‑Annual Report issued by the Public Interest and Accountability Committee (PIAC) raises a critical question for policy‑makers, investors and civil‑society groups: should Ghana continue to invite fresh upstream petroleum projects when recent activity suggests a slowdown in drilling and a lack of new petroleum agreements since 2018? This article unpacks the data presented in the PIAC report, explains the technical and financial context, and offers practical guidance for stakeholders who must decide whether to support or pause further investment in Ghana’s oil and gas sector.

Analysis

Current State of Upstream Activity (Jan–Jun 2025)

According to the PIAC findings, the period from January to June 2025 was marked by:

• Only one successful well drilled on the Jubilee field, which is now in the completion phase.
• Zero drilling or completion operations on the TEN field, where operator Tullow Oil reported no activity for the first half of 2025.
• ENI’s sidetrack operation on the SNKE‑1X ST well in the SGN (South Ghana North) block, executed after obtaining a ministerial amendment to the original Plan of Development (PoD).
• Progress on the Pecan Energies PoD for the ENH (Ennedi‑North‑Harbour) block, which entered preparatory work in June 2023 but had not yet reached a Final Investment Decision (FID) by June 2025.

Technical Highlights

The ENI sidetrack illustrates the type of high‑cost, high‑risk engineering required to optimise marginal fields:

1. De‑completion, plugging and abandonment of the original wellbore.
2. Pilot‑hole drilling to define the optimal trajectory for the new drain hole.
3. Open‑hole gravel‑pack completion of the sidetrack, aimed at improving production efficiency.

These steps, while technically sound, underscore the escalating expense of extracting the remaining reserves in mature fields.

Seismic and Exploration Activities

The Petroleum Commission (PC) reported that Phase IV of GNPC’s 2‑D seismic acquisition programme was completed in April 2024. The programme, split into Areas A and B, increased grid density, reduced geological uncertainty, and identified new prospective structures in the Voltarian Basin. However, the report notes that only a handful of blocks have seen any exploratory drilling in the first half of 2025, while many remain idle.

Financial Overview

The PIAC report analyses revenue streams from the petroleum sector, including:

• Production volumes and lift‑sales.
• State‑earned royalties and taxes.
• Allocation of the Annual Budget Funding Amount (ABFA) to the Ghana Petroleum Funds – specifically the Ghana Stabilisation Fund (GSF) and the Ghana Heritage Fund (GHF).

Despite a modest increase in total earnings, the report highlights that the financial contribution is insufficient to justify large‑scale new upstream investments without a clear upside.

Summary

The 2025 PIAC semi‑annual report paints a picture of a sector that is:

• Experiencing a **drilling slowdown** – only one new well completed, none on TEN.
• Facing **high‑cost optimisation** projects (e.g., ENI sidetrack) that may not yield proportional revenue.
• Limited in **new investment decisions**, as Pecan Energies has not yet reached FID.
• Benefiting from **improved seismic data** (Voltarian Basin) but lacking follow‑through drilling.
• Generating **modest state revenue**, which is largely earmarked for stabilization and heritage funds.

Collectively, these trends suggest that Ghana should adopt a cautious stance toward attracting fresh upstream petroleum capital until the existing portfolio delivers stronger returns.

Key Points

Practical Advice

For Government Decision‑Makers

1. Prioritise fiscal sustainability: Conduct a cost‑benefit analysis that compares projected tax/royalty income from new projects against the capital outlay required for infrastructure, environmental safeguards and de‑completion costs.
2. Strengthen the PoD review process: Require clear, quantifiable production uplift before approving amendments, as demonstrated in the ENI case.
3. Leverage seismic data: Use the high‑resolution 2‑D grids from the Voltarian Basin to target only those blocks with a proven commercial prospect, reducing exploration risk.
4. Align with the Onshore Petroleum Exploration and Production Policy: Ensure that any new licences are consistent with the policy’s sustainability and local‑content clauses.

For Investors and Operators

1. Demand transparent FID criteria: Insist on a clear timeline and performance milestones before committing capital, especially for projects like Pecan Energies that remain in the preparatory stage.
2. Plan for de‑completion costs: Include abandonment and plugging expenses in the economic model; these have become a non‑trivial portion of total project cost in mature fields.
3. Explore partnership models: Joint ventures with Ghanaian entities can mitigate political risk and enhance compliance with local‑content requirements.
4. Monitor regulatory updates: Stay informed about ministerial approvals for PoD changes, as they can affect project timelines and profitability.

For Civil‑Society and Academia

1. Promote data transparency: Advocate for public release of drilling logs, production data and fiscal receipts to enable independent analysis.
2. Engage in policy dialogue: Participate in stakeholder workshops organised by the Ministry of Energy and the Petroleum Commission to shape future licensing frameworks.
3. Research environmental impact: Conduct independent assessments of de‑completion activities to ensure that abandonment does not compromise marine or terrestrial ecosystems.

Points of Caution

While the PIAC report offers a comprehensive snapshot, readers should consider the following limitations:

• Data cut‑off: The report covers only the first six months of 2025; activities in the latter half of the year may alter the overall trend.
• Operator confidentiality: Some commercial details (e.g., exact drilling costs) are not disclosed, which can affect the precision of financial modelling.
• Policy volatility: Ghana’s energy transition agenda could lead to rapid regulatory shifts, especially with the Ministry of Energy and Green Transition pushing for renewable integration.

Comparison

Ghana vs. Regional Peers (Nigeria, Côte d’Ivoire)

Ghana’s drilling activity and new‑agreement pace lag behind its neighbours, reinforcing the PIAC recommendation to pause new upstream inflows until the sector demonstrates stronger performance.

Legal Implications

Three legal dimensions emerge from the report:

1. Petroleum Agreement Amendments: ENI’s sidetrack required an amendment to the original PoD under the Petroleum (Exploration and Production) Act 2020. Such amendments must be approved by the Minister of Energy and Green Transition and are subject to public consultation.
2. Final Investment Decision (FID) Thresholds: The Petroleum Commission’s licensing framework mandates that operators submit a detailed FID dossier, including environmental impact assessments (EIAs) and financial guarantees, before a licence can be upgraded to “development” status.
3. De‑completion and Abandonment Obligations: Section 45 of the Petroleum Act obliges operators to submit a De‑completion Plan, obtain a closure licence, and provide financial security (typically a bond) to cover plugging and abandonment costs.

Failure to comply with any of these statutory requirements can result in licence suspension, monetary penalties, or revocation, underscoring the importance of robust legal compliance for any prospective investor.

Conclusion

The 2025 PIAC semi‑annual report makes a compelling case that Ghana’s upstream petroleum sector is currently under‑performing relative to its potential. With only one well reaching completion, a notable absence of new drilling on the TEN field, and a lack of fresh petroleum agreements since 2018, the fiscal and environmental risks of courting additional upstream investment outweigh the modest revenue gains observed in the first half of 2025. Stakeholders should therefore adopt a measured approach: consolidate existing assets, fully exploit the data generated by the Voltarian Basin seismic programme, and only consider new licences once clear, evidence‑based production upside is demonstrated.

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