Ghana’s oil output peaked in 2019 – PIAC warns of sharp manufacturing decline – Life Pulse Daily

Introduction to Ghana’s Oil Production Decline

Ghana’s petroleum sector, which has been a cornerstone of the nation’s economy since the discovery of its first commercial oil reserves in 2007, has experienced a significant shift in recent years. According to data from the Public Interest and Accountability Committee (PIAC), Ghana’s oil production reached its zenith in 2019, with 71 million barrels extracted that year. However, this output has since plummeted, dropping to 48 million barrels by the end of 2024 and further declining to 18 million barrels by mid-2025. This sharp downward trend raises urgent questions about the long-term sustainability of Ghana’s petroleum-dependent economy. As the Head of the PIAC Secretariat, Isaac Dwamena, has emphasized, the decline threatens critical national initiatives funded by oil revenues. The situation underscores the need for a comprehensive analysis of Ghana’s oil production landscape, the challenges it faces, and the strategies required to address this pressing issue. This article explores the causes, implications, and potential solutions to Ghana’s oil manufacturing decline, guided by PIAC’s warnings and expert insights.

Understanding the Decline: Analysis and Causes

The Natural Depletion of Ghana’s Major Oil Fields

Ghana’s primary oil-producing regions, notably the Jubilee and TEN fields, are facing natural depletion. These fields, which account for the majority of the country’s crude output, are aging, with the Jubilee field alone operational since December 15, 2010. By mid-2025, the Jubilee field is estimated to be past the midpoint of its 25–30-year lifespan. As Isaac Dwamena explains, petroleum is a finite resource; extraction inevitably leads to dissipation. Advanced technologies currently allow recovery of only 35–40% of reserves, leaving significant portions unextractable even with optimal methods.

Impact of Recent Investments on Production

Temporary investments have slowed the depletion rate. The Greater Jubilee Development Project (2013–2015) and the Jubilee South East expansion (completed in 2024) injected fresh life into production by optimizing extraction efficiency. Without these initiatives, Ghana’s output might have collapsed even more severely. However, such investments cannot fully counter aging fields, making exploration for new reserves a necessity.

Government Revenue and Economic Implications

Petroleum revenue funds approximately 10% of Ghana’s national budget, supporting infrastructure projects and public services. The steep decline in oil production jeopardizes this funding source, potentially disrupting programs like the National Oil Fund and energy subventions. PIAC’s 2025 Semi-Annual Report urges policymakers to prioritize long-term strategies to stabilize revenue streams.

Summary of Key Trends and Insights

Ghana’s oil production has halved since 2019, with Jubilee and TEN fields nearing exhaustion. While recent investments slowed the decline, they do not eliminate the need for new discoveries. The 2025 PIAC report underscores the risks of inaction, warning of economic instability if petroproduction continues to wane without innovation.

Key Points and Takeaways

• Peak and Decline: Ghana’s oil output peaked in 2019 at 71 million barrels, falling to 18 million barrels by 2025.
• Depletion Drivers: Natural reserves depletion in Jubilee and TEN fields is a primary cause.
• Role of Investments: The Greater Jubilee and Jubilee South East projects mitigated but did not halt the decline.
• Economic Impact: Oil revenue accounts for 10% of national budget allocations.
• Future Needs: Exploration of new fields and sustainable resource governance are critical.

Practical Advice for Stakeholders

Accelerating Exploration Efforts

To counteract depletion, Ghana must prioritize geophysical surveys and deep-sea drilling to locate undiscovered reserves. Collaboration with international firms, such as those in the Gulf of Guinea, could accelerate discoveries.

Modernizing Extraction Technologies

Investing in enhanced oil recovery (EOR) techniques, such as hydraulic fracturing, could maximize the output of existing fields. Such innovations are crucial for sustaining production until new reserves are found.

Diversifying Energy Revenue Streams

The government should incentivize renewable energy adoption, such as solar and wind, to reduce reliance on oil. Revenue from petroleum should be channeled into training programs for workers in emerging sectors.

Points of Caution

Environmental and Social Risks

High oil production rates historically led to ecological concerns, including oil spills and habitat destruction. As reserves age, the risk of accidents may rise, necessitating stricter environmental regulations.

Economic Dependency and Vulnerability

Over-reliance on oil revenue leaves Ghana exposed to global price fluctuations. South Sudan’s 2013–2016 crash, triggered by a 50% drop in oil prices, offers a cautionary tale. Diversification is essential.

Comparative Insights: Ghana vs. Global Peers

Lessons from Norway’s Transgenic Model

Norway’s sovereign wealth fund, bolstered by North Sea oil revenues, demonstrates how responsible management of finite resources can ensure long-term stability. Ghana could adopt similar frameworks for oil income savings.

Contrasting with the UAE’s Strategic Approach

The UAE’s diversification away from oil toward tourism and technology highlights the risks of stagnation. Ghana’s oil wealth, while vital, must evolve beyond extraction to sustain economic growth.

Legal Implications and Governance

Compliance with the Petroleum Revenue Management Act (Act 815)

Under Act 815, Ghana’s government must ensure transparency in revenue reporting and allocation. PIAC’s 2025 report stresses accountability to prevent mismanagement and corruption, which could exacerbate resource depletion.

Judicial Oversight and Public Participation

The act mandates parliamentary oversight of oil revenues. Enhanced public engagement in resource governance could improve accountability, aligning with global best practices.

Conclusion and Path Forward

Ghana’s oil production decline, though alarming, signals an opportunity to modernize its petroleum governance. By investing in exploration, technology, and diversification, the nation can secure its economic future beyond finite resources.

Frequently Asked Questions (FAQ)

Why did Ghana’s oil production drop after 2019?

Ghana’s Jubilee and TEN fields, discovered in the 2000s, are nearing depletion. Aging infrastructure and insufficient new discoveries have reduced output.

How do oil revenues impact Ghana’s budget?

Oil revenue funds 10% of national spending, including education and healthcare. A sustained decline threatens these sectors.

What steps can Ghana take to reverse the decline?

Accelerating exploration, adopting advanced extraction technologies, and diversifying into renewables are critical interventions.

Sources and References

• PIAC Semi-Annual Report 2025, Public Interest and Accountability Committee.
• Ghana National Petroleum Authority (GNPA) production data, 2019–2025.
• (Act 815) Petroleum Revenue Management Act, passed in 2022.

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