Technical Manager of the Public Interest and Accountability Committee (PIAC), Mark Agyemang, has revealed that they have been warning of a decline in crude oil production since 2018.

This follows a PIAC report indicating that crude oil production in Ghana declined for the fourth consecutive year in 2023.

According to Mr Agyemang, operational issues and regulatory and governance challenges have led to a drastic decline in oil production. As a result, the sector has not seen any new petroleum agreements since 2018.

Addressing the issues of some oil fields on PM Express on JoyNews, he said that the Jubilee Oil Field, which started production in 2010, risks depletion due to operational challenges.

“Jubilee is 12 or 13 years into its production life. It's projected to have a lifespan of 25 years. Now it's more like halfway through its production life. So you naturally expect a decline because reservoir pressure is being depleted.

"So they have to kind of adopt artificial measures, either gas injection, water injection, and the like to bring on stream more oil.”

Additionally, the management of the Tweneboa Enyenra Ntomme (TEN) Oil Field has admitted operational challenges to PIAC and is working to address them, Mr Agyeman said.

“Sankofa and GyeNyame Fields are predominantly a gas field. Oil is associated with gas, so you produce more gas than oil. So it is usually expected that production, oil production from Sankofa and GyeNyame Fields will be lower than TEN and Jubilee,” he said.

On governance, Mr Agyemang believes that Ghana has not learnt lessons from its first licensing round - the occasion when a governmental body offers exploration acreage for leasing by exploration and production companies, typically in return for a fee and a performance or work obligation.

He explained that collaboration between PIAC and CSOs revealed that low-quality data and the small size of blocks leased to various companies for oil exploration and production have negatively affected the attraction of investors into the sector.

“The data represented (industry stakeholders) was of low-quality, a 2D data, where industry players if they acquired that data, have to spend extra money to process that data, bring it up to either 3D or 4D. So they shied away from that,” Mr Agyemang said.

Furthermore, he noted that the calls from supermajors like Total, Shell, ExxonMobil, and others for an increase in block sizes have been ignored for years.

“We've gone on roadshows as a country, led by the energy ministry. We've gone to South Africa, Norway, and OTC in Houston, with the same kind of data and the same kind of block sizes. Definitely, and with this energy transition on our neck, you will likely not be able to attract the right kind of investment into the space.”

“So since 2018, we have not signed any new petroleum agreement. In fact, four companies have had their petroleum agreements abrogated or terminated over that period that we are talking about. We've not brought on stream new companies, we've not brought on stream new production fields. So definitely you expect that it will decline over time.”

PIAC 2023 Report

Throwing light on happenings in the upstream petroleum sector, the report indicated that crude oil production reduced "from a high of 71.44 million barrels in 2019 to 48.25 million barrels in 2023."

This represents an annual average decline of 9.2%.

Of the 48 million barrels, 63% came from the Jubilee Fields, 23% from SGN and 14% from TEN.

"For the year 2023, a total of 48,247,036.61 barrels (bbls) was produced from the three producing fields; Jubilee – 30,444,217 bbls (63%); TEN - 6,716,278 bbls (14%) and SGN 11,086,541.61 bbls (23%)."

For raw gas, a total of 255,171.97 MMSCF was produced in 2023 from the SGN Field (127,203.02 MMSCF, 50%), Jubilee (77,900.05 MMSCF, 30%) and TEN Fields (50,068.90 MMSCF, 20%). The average achieved price by the Ghana Group for all three (3) producing fields during the period under review was US$78.067/bbl.

On the back of this, the committee recommended that the government and the relevant regulatory bodies should take the appropriate steps to reverse production decline in existing fields and ensure investments in unexploited fields.

The 2023 Annual Report is in fulfilment of PIAC’s obligation under the Petroleum Revenue Management Act, 2011 (Act 815), as amended by Act 893, to publish Semi-Annual and Annual Reports.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.