GHANA LOSING APPEAL AS A DESTINATION FOR PETROLEUM INVESTMET

Ghana’s once-promising petroleum industry is facing mounting difficulties that have eroded its attractiveness to global investors. Oil production has dropped significantly—from a peak of 71.4 million barrels in 2019 to just 48.25 million barrels in 2023—primarily due to maturing fields like Jubilee and TEN, and a lack of new discoveries.

This downturn has been compounded by the withdrawal of major international oil companies such as ExxonMobil, Anadarko, and Aker Energy. Their exits have been linked to regulatory uncertainty, bureaucratic delays, and an uncompetitive fiscal environment. Notably, Ghana’s 35% corporate tax rate for the oil and gas sector has been flagged as less favorable compared to neighboring countries with more investor-friendly policies.

The stalled progress of oil block licensing rounds—especially since the 2018 bid round—has further shaken investor confidence, with awarded blocks remaining undeveloped due to contract disagreements and slow government processes.

The resulting decline in investment has had a noticeable impact on revenue. Petroleum income fell by 62.63% in the second half of 2024, plummeting from $840.77 million to $517 million, raising alarms about the sustainability of Ghana’s oil-reliant economy.

In a bid to revive the sector, the government has launched a $12 billion petroleum hub project in the Western Region, aiming to position Ghana as a regional energy trade hub. However, analysts argue that without substantial reforms—such as simplifying licensing procedures, offering tax incentives for exploration, and improving transparency—the hub alone may not attract the needed investment.

Experts stress that reviving investor interest will require deliberate and comprehensive policy changes to restore confidence and unlock Ghana’s full petroleum potential.