Despite the international dip in oil prices, in recent years, Ghana’s oil and gas industry has sustained economic growth at a steady pace. The nation’s petroleum sector has experienced momentous levels of development, particularly since the discovery of oil in commercial quantities in the Jubilee fields in 2007, making it a target for many foreign investors around the world. Following this discovery, the Ghanaian government has intensified all its efforts to design policies and legislative frameworks to govern and manage the exploitation and allocation of the country’s resources in a sustainable way.
Being the first sub-Saharan country to gain independence in 1957, Ghana has been regarded as one of the most stable African democracies. Attributes such as the country’s low level of corruption, mature macroeconomic structure, and minimal violent conflicts are leading factors in the country’s stable economy.
In addition, Ghana ranks ninth in Africa in terms of oil and gas production—estimated to hold 700 million barrels of oil (MMbbl) and 800 billion cubic feet (Bcf) of gas. In fact, the country has seen major advancement in the creation of two additional production fields in Sankofa in 2017 and Tweneboa-Enyera-Ntomme (TEN) in 2018. These fields have since increased local natural gas production and reduced the county’s oil and gas imports. Ghana’s petroleum industry continues to contribute to the country’s booming economy since the start of oil production in December 2010.
While it is important to note that some of the major oil and gas activities are conducted by international oil companies such as Tullow Ghana, Vitol, Kosmos Energy, ENI, and Aker Energy, it is relevant to acknowledge Ghana’s efforts towards local participation. Numerous indigenous entities are responsible for developing Ghana’s petroleum sector. For example, Ghana National Petroleum Corporation (GNPC) engages people of the public or entities seeking to participate in the exploration and production of oil and gas in the country, through a competitive public tender process, while ‘Ghana Gas’ builds, owns and operates the government’s infrastructure for gathering, processing, transporting, and marketing natural gas.
Furthermore, the development of the petroleum industry boils down to the country’s legislation of the Petroleum (Exploration and Production) Act, 2016 (ACT 919). This Act ensures that all natural resources, taking into consideration the geographic location of said resources is the property of the Republic of Ghana, is entrusted in the president on behalf of the people of Ghana. Petroleum activities in the country, can only be conducted under a license or a petroleum agreement which falls part of the Section 5 of the Petroleum (Exploration and Production) Act of 2016 (Act 919)).
In attempts to strike a balance between the distribution of petroleum products throughout the country and promote economic growth, the government of Ghana has announced the introduction of the Digital Retail Outlet Fuel Monitoring System and the installation of an automation system technology in every gas station in the nation. This aims to reduce unlawful activities in petroleum down-streaming, such as illegal third-party deliveries, fake receipts, and smuggled goods. “It will enhance Ghana’s capacity to contribute to Africa’s progression in the oil and gas sector”, said Yorm Abledu, attorney at Centurion Law Group.
For further details Ghana’s oil and gas regulations, and Centurion Law Group’s Investment Guides, please visit: https://centurionlg.com/clg-africa-investment-guide/