According to the Public Interest and Accountability Committee's (PIAC) most recent report, Ghana's crude oil industry is under increasing strain as production has been declining for the fifth year in a row. From a peak of 71.44 million barrels in 2019, the nation's output dropped to 48.25 million barrels in 2024, a concerning trend that suggests more serious issues facing the petroleum sector. Even if the 2024 year-to-year fall was only 0.01 percent on average, the overall trend shows a 7.4 percent annual decline over the previous five years. Given that oil earnings continue to be a crucial source of finance for government initiatives, this prolonged decline is casting doubt on Ghana's upstream petroleum activities' long-term sustainability.
In addition to declining production, the PIAC report highlights concerning deficiencies in the handling of petroleum revenue. As required by law, GNPC Explorco, a subsidiary of the Ghana National Petroleum Corporation, did not deposit US$145.68 million from oil liftings into the Petroleum Holding Fund in 2024. The entire amount withheld by JOHL and GNPC Explorco now stands at around US$489 million, adding to an already expanding backlog. PIAC has continuously rejected GNPC's allegation that Explorco's profits are exempt from PHF contributions. To stop more violations and maintain public confidence in the administration of oil income, the committee is calling for increased openness and legal clarity.
A recurring issue with surface rental arrears payable by foreign oil corporations is also revealed in the report. The government owes US$2.89 million in outstanding fees as of December 2024. The fact that three companies whose contracts were terminated back in 2021 are responsible for an alarming 60% of this debt raises new questions regarding lax enforcement and the state's capacity to recoup lost money.
The need for immediate reforms in Ghana's petroleum industry is growing as output declines and financial oversight deteriorates.
