Ghana’s petroleum sector continues to face deepening structural and governance challenges, as crude oil production declines for the sixth consecutive year and petroleum revenues suffer sharp contractions, according to the 2025 Annual Report of the Public Interest and Accountability Committee (PIAC).
The report paints a troubling picture of a sector grappling with maturing oil fields, limited upstream investment, compliance breaches in revenue management, and rising financial risks across state-owned petroleum and gas entities.
PIAC confirms that Ghana’s crude oil production fell from 71.44 million barrels in 2019 to 37.3 million barrels in 2025, representing an average annual decline of about 9 percent.
The sustained downturn reflects natural reservoir depletion in aging fields, persistent technical constraints, and subdued investment activity in upstream exploration and development.
Operational challenges remain pronounced, particularly at the Tweneboa–Enyenra–Ntomme (TEN) Field, where gas reinjection reportedly reached 81 percent, underscoring limited gas utilisation capacity and declining field efficiency.
PIAC warns that without deliberate interventions, Ghana risks accelerated depletion of existing assets without meaningful replacement.
It recommends the development of a targeted framework to stimulate investment in mature fields — especially TEN — alongside improved fiscal and regulatory terms to attract new basin exploration.
The committee also urged a medium-term plan to enhance reservoir interconnectivity at TEN to extend its productive life.
The fall in production translated directly into weaker fiscal performance. According to the report, total petroleum receipts dropped by 43.27 percent to US$770.27 million in 2025, down from US$1.36 billion in 2024.
Crude oil lifting revenues declined by 50.58 percent, while the complete absence of inflows from the TEN Field further eroded revenue performance.
PIAC noted that petroleum revenue remained heavily concentrated in only two producing fields — Jubilee and Sankofa-Gye Nyame (SGN) — exposing the country to heightened fiscal vulnerability.
This narrow revenue base, coupled with declining output, increases Ghana’s exposure to macroeconomic volatility and weakens the stabilisation role petroleum revenues are expected to play.
One of the most serious concerns highlighted in the report is the non-utilisation of the 2025 Annual Budget Funding Amount (ABFA).
PIAC disclosed that US$434.55 million earmarked for infrastructure under the government’s Big Push programme remained parked in a suspense account and was not utilised during the period under review.
Additionally, transfers to the District Assemblies Common Fund (DACF) amounted to just 0.43 percent of ABFA, far below the statutory minimum of 5 percent, constituting a breach of both the Petroleum Revenue Management Act (PRMA) and the 1992 Constitution.
PIAC also flagged limited transparency and inadequate stakeholder consultation surrounding recent amendments to the PRMA, warning that such practices undermine the credibility of the petroleum revenue governance framework.
To address these lapses, the committee recommended transferring the unutilised ABFA directly to the Ministry of Roads and Highways, bypassing the GIIF Special Purpose Vehicle, and publishing full project details — particularly for the Accra–Kumasi Expressway.
It further called for the revival of the comprehensive PRMA amendment process stalled since 2019 and the development of a long-term national development plan approved by Parliament to guide ABFA utilisation.
While the total value of the Ghana Petroleum Funds (GPFs) increased modestly from US$1.46 billion to US$1.55 billion, PIAC cautioned that the growth obscured underlying governance challenges.
The committee noted that the cap on the Ghana Stabilization Fund (GSF) was not applied in accordance with L.I. 2381, resulting in deviations from the legally prescribed formula.
Although the Ghana Heritage Fund recorded growth, the decline in the Stabilization Fund raised concerns about the integrity of fund management and adherence to the PRMA.
PIAC urged Parliament to ensure strict compliance with L.I. 2381 when approving Ministry of Finance appropriations to safeguard the stabilisation function of the fund.
The report identified serious financial and accountability challenges within the Ghana National Petroleum Corporation (GNPC).
GNPC receipts declined by 61.55 percent, largely due to reduced petroleum inflows and policy changes, even as cash call obligations — particularly for the TEN Field — continue to rise.
More critically, PIAC revealed that US$561.65 million in petroleum revenue remained unaccounted for by Explorco, GNPC’s subsidiary, raising major transparency and governance concerns.
The committee recommended that GNPC and Explorco urgently account for and deposit the outstanding amount into the Petroleum Holding Fund (PHF).
PIAC also flagged the financial position of the Ghana National Gas Company Limited (GNGLC) as a continued risk to the energy sector.
Although marginally reduced, GNGLC’s outstanding debt remained elevated at US$620.54 million.
Persistent tariff distortions, weak industrial gas pricing structures, and legacy debts continue to threaten revenue integrity and stability across the gas-to-power value chain.
PIAC warned that without corrective action, these structural weaknesses will further undermine sector efficiency.
The committee recommended clarifying the industrial gas pricing policy framework and implementing a time-bound debt amortisation plan under the Cash Waterfall Mechanism to accelerate GNGLC’s deleveraging.
Through the report, PIAC reiterated the urgency of managing Ghana’s finite petroleum resources with prudence, transparency, and strict adherence to the legal framework. With production declining and revenue pressures mounting, the committee stresses the need for strategic deployment of petroleum revenues to deliver sustainable, inclusive, and intergenerational benefits.
The findings underscore a critical moment for policymaking as Ghana navigates the dual challenges of declining resource output and rising development needs.
By: Christian Akorlie / businesspostonline
