Ghana's oil production increases for the first time in five years

Ghana's crude output increased 10.7% on an annual basis in the first half of 2024. This reversed a five-year-old decline in production.

Ghana, Africa's largest gold producer, started producing crude oil in 2010. However, output dropped to a 5-year low by 2023, due to declines in production from existing fields. This effectively erased gains made by new wells.

PIAC, a government body tasked to monitor the oil sector, reported that the production of crude oil had risen to 24,86 million barrels in June 2024. This is compared with a decline of 13.2% over the same time period in 2023.

The Jubilee South East project (JSE), operated by Tullow Oil and which began production at the end of 2023, was a major contributor to this increase.

The JSE is the first new oil discovery in Jubilee, the country's oldest oil field where production had peaked.

Isaac Dwamena told reporters on Thursday that he was hopeful the increase in oil production during the first half of 2024 would be sustained.

PIAC's half-year report also showed a 56% increase in oil revenue year-on year to $840.8 millions by June. This was largely due to the increase in oil production.

According to PIAC, Ghana's government relies on oil revenue for 7% of its income.

The gas output increased by 7.5% to 139.86 standard cubic feet in June.

Dwamena outlined the challenges facing Ghana's oil sector, including both natural and technological issues.

Ghana's laws require that oil companies allocate at least 12 percent of each project as carried and free interest to the government. Dwamena said this requirement can be expensive for investors.

He said: "The state could take 15% or 20% in carried interest, based on negotiation, and this has been a deterrent."

The West African nation plans to increase production by selling more exploration rights. This will prevent fossil fuels from being stranded and provide revenue to fund its energy transition.

Eni, Tullow, Kosmos and PetroSA are some of the oil companies that operate in Ghana. Reporting by Maxwell Akalaare Adombila Editing and proofreading by Bate Felix and Elaine Hardcastle

(source: Reuters)