Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, has lamented the inefficiencies within management of the country’s resources – which he underlines has been a critical setback to increasing Ghana’s crude oil production.
Ghana has signed eighteen petroleum agreements/contracts (PAs) since 2004 covering its offshore basins: namely the Accra-Keta cretaceous basin (Eastern); Saltpond (Central) palaeozoic basin; and Tano-Cape Three Points cretaceous basin (Western). Of these, three producing fields, namely the Jubilee, Tweneboa-Enyenra-Ntomme (TEN) and Sankofa-Gye Nyame (SGN), accounted for petroleum revenues as of end-2020.
According to the Public Interest and Accountability Committee (PIAC), the data in a recent report show that total production from Ghana’s three fields peaked in 2020.
But worryingly, it said production will continuously decline if nothing is done through new in-fill developments on these existing fields or new fields coming on-stream.
“Peaking is further compounded by reservoir challenges leading to production losses on some fields. At the same time, the above-surface issues include FPSO reliability challenges and delayed gas processing infrastructure forcing gas re-injection, which is ultimately negatively impacting performance,” it noted.
But speaking on ‘Developments in the Energy Sector’ at a stakeholder’s engagement, organised by the Natural Resources Governance Institute (NRGI) in collaboration with PFM Tax Africa, Mr. Boakye asserted that the country has been poor in making decisions (in its oil fields) that matter.
“We haven’t been able to add-on to production because decisions have been poor. We have not been making the right decisions at the right time, and this has cost the country a lot of resource revenue,” he stated.
While it has been long overdue for most companies to move from exploration to development in the oil sector, he noted with concern that this has not been the case while government looks on unconcerned.
Given some of these situations, he said, government will have to be quicker in making decisions concerning the development of oil fields – and be much more transparent.
“We have not been able to successfully award a petroleum block under the Exploration and Production (E&P) law passed in 2016, through competitive bidding. We gave up blocks, the tender process ended in 2018; but we are still struggling to conclude negotiations which will allow the companies to go onsite to drill,” he stated.
He argued that government must, as a matter of urgency, check some of these inefficiencies and aggressively explore the resource sector to bring in more revenue to the state.
Furthermore, he urged government to reconsider how it has been treating revenues – particularly in situations that seek to take away revenue from the budget and entrust it to the hands of a body that manages such revenue at their discretion without any accountability mechanisms in place.
He cited the Minerals Income Investment Fund’s (MIIF) work in the recent AGYAPA impasse, while also quizzing some of their investment decisions including the purchase of 14.4 million ordinary shares in the Asante Gold Corporation (a mining exploration and development company listed on the Toronto and Frankfurt Stock exchanges).
The stakeholder’s engagement looked at the ‘Review and Compliance of the PFM Laws in Ghana – Digging Ghana from the Trenches’, to explore the current PFM regime’s role in turning around the economic fortunes of Ghana.
The Africa Programme Officer of NRGI, Denis Gyeyir – speaking on behalf of the West Africa Regional Manager of NRGI, noted the critical concerns on PFM and encouraged discourse to help arrive at solutions which address some of the emerging challenges.
