Ghana Oil and Gas Sector
Recent surges in international energy prices help spur initiatives to expand Ghana’s oil and gas sector.
Ghana is an up-and-coming player in the oil and gas industry with operations in the upstream (exploration and production), mid-stream, and downstream sectors. After the discovery in 2007, of oil and gas in commercial quantities, Ghana took concrete steps to develop a successful oil and gas sector. Commercial production begun in the Jubilee field in 2010 and the Ghanaian Government set up a Petroleum Commission in 2011 to regulate the upstream industry. Ghana’s current output is 126,000 barrels of oil per day with the potential for increased output in the near future. As such, many international companies have established their presence in the upstream industry.
Although Ghana has emerged as a significant oil and gas producer, it has been hit hard by the recent rise in international fuel and energy prices. Ghana still imports fives times the value of oil and gas that it exports. It continues to lack sufficient downstream value-added in areas such as refining. Another key area to develop is infrastructure to ensure that Ghana’s own gas can reach its domestic power plants. Ghana also may be able to better position itself to take advantage of anticipated new global demand for Liquid Natural Gas (LNG). Further, Ghana is the largest West African importer of chemical fertilizer. It has little domestic production beyond the blending of imported fertilizer. The global shortage of chemical fertilizer creatives incentives for Ghana to use its natural gas to develop a downstream ammonium nitrate and urea industry to meet domestic fertilizer demand.
There is an immediate need for oil and gas service firms that are able to partner with indigenous Ghanaian companies to support the offshore activities of the international oil companies. Domestic Ghanaian companies do not have the ability to provide a broad range of services despite local content requirements mandating a minimum level of local participation. Joint-venture firms with foreign partners contributing technology and know-how to a partnership with a reliable local company will be highly sought-after.
Ghana’s Ministry of Energy, as part of its announcement of investment projects for the next three years, highlighted the following opportunities:
- In addition to providing equipment and services directly to the exploration and production companies, training programs to increase the capacity of Ghanaian firms to provide these services are likely to be highly successful.
- The development of farm-ins or deals where a company, not at present a licensee on a particular licensed area, can acquire an interest from one of the existing licensees.
- Development of infrastructure in the natural gas sector in projects such as the Western Corridor Gas Infrastructure Development Project (WCGIDP).
- Upgrade the gas processing plants’ capacity to 300 million standard cubic feet per day (MMSFD) as part of the Phase Two of WCGIDP.
- Liquid natural gas and liquid petroleum gas-related projects and infrastructure.
- The Government has provided land and basic infrastructure such as roads, water, and electricity, but requires private sector participation to develop a facility within the Petroleum Hub Development Authority.
- The Ghanaian Government will establish three refineries with a 300,000 Barrels per stream day (BPSD) capacity.
- Tank farms to be constructed for storage of crude and other refined products.
- Construction of two or more jetties with multiple berths.
- Five petrochemical plants to be constructed to produce fertilizer such as ammonia and urea.
Ghana’s parliament passed extensive amendments to its Petroleum Revenue Management Act and the Petroleum Exploration and Production Bill which updates a 1984 petroleum law and seeks to make the management of Ghana’s petroleum resources more transparent. Many oil and gas sector stakeholders have publicly expressed their support for the new legislation. However, there are still a few elements that could cause concern for oil and gas companies seeking to do business in Ghana. The bill, for example, gives the Minister of Petroleum the power to reject a petroleum contract, even after a tender process has been concluded.
Commercial Service Ghana will lead a 28-person delegation to the Offshore Technology Conference in Houston on May 2-5, 2022. Connect with key industry players at OTC and consult with delegation lead, Rita Adubra-Asante, about market entry and the business climate in this sector.
For more information about the oil and gas sector in Ghana and to explore these opportunities, contact the Rita Adubra-Asante in the Commercial Section of U.S. Embassy Ghana at firstname.lastname@example.org, Tel: +233(0)30-274-1715.