Investments in Ghana’s oil sector is expected to rise by 50% next year as the near-term outlook for oil production looks brighter.

According to Fitch Solutions, oil production will still decline by 2.0% next year as earlier forecast, due to weaker capital expenditure.

The research arm of ratings agency, Fitch, said the projected boost in Ghana’s oil output will be partly as a result of improve gas offtake performance and higher water injection rates, which will both help maintain higher production.

In the first half of this year, gas offtake nominations from the Ghana National Gas Corporation increased by 63% at the Jubilee and TEN fields.

“The forecast boost in Ghana’s oil output will be partly a result of improved gas offtake performance and higher water injection rates, which both help maintained higher production. In half-year 2020, gas offtake nominations from the Ghana National Gas Corporation increased by 63% at the Jubilee and TEN fields, to 106mmscf/d.”

Tullow Oil – operator of the country’s two largest fields, TEN and Jubilee – recently announced net capital expenditure will increase to $180 million dollars in 2021, from $120 million in 2020.

This includes plans for a multi-well drilling campaign, expected to begin in the second quarter of next year.

“Since TEN and Jubilee are responsible for 80% of Ghana’s total oil production, this investment boost is significant for the country’s upstream sector. Given the planned spending, we have revised our previous forecast, which anticipated a stagnation in production until Aker Energy’s Pecan Field comes online”, it pointed out.

“We now expect an uptick in production to average 2.0% year-on-year between 2022 and 2024, as the planned drilling activity will help offset the declining output rates at Ghana’s fields. However, due to comparably weaker capex spending in 2020, we maintain our expectation that production will decline by 2.0% in 202”, it further said.

Aker Energy’s Pecan Field expected to come online in 2025

Fitch Solutions said the anticipated development of the 110,000 barrels of oil per day at Pecan field holds the key to the country’s oil future.

“Having been initially expected to require an investment of $4.4 billion, Aker Energy and its partners are now aiming to reduce the capex needed for the project. They aim to find a development concept with a sustainable break-even price, should a low oil price environment continue.”

Crude oil is presently trading at $51 per barrel on the world market.