Ghana’s Oil Output Decline a Strategic Warning – Energy Chamber
The Energy Chamber of Ghana has cautioned that the 2025 Annual Report of the Public Interest and Accountability Committee (PIAC) should be interpreted as an early warning signal rather than a routine sector review, citing deep structural challenges within Ghana’s petroleum industry.
The Chamber describes the report as evidence of a prolonged and worsening downturn in the oil and gas sector, warning that the situation now threatens the long-term stability of the country’s energy economy.
According to the findings highlighted, crude oil production has steadily declined over the past five years, dropping from 71.44 million barrels in 2019 to just 37.3 million barrels in 2025. This represents nearly a 48 percent reduction in output, signalling a sustained contraction in the upstream petroleum industry.
The Chamber further noted that petroleum revenues have also suffered a sharp decline, falling by 43.27 percent year-on-year to approximately US$770.27 million. It described this trend as alarming, especially given the limited replacement of reserves and persistent governance weaknesses in the sector.
The Energy Chamber stressed that the 2025 PIAC report must not be treated as a standard accountability document but rather as a strategic alert highlighting urgent risks requiring immediate policy attention.
It warned that Ghana’s petroleum framework is becoming increasingly fragile, with rising exposure to upstream risks due to inadequate investment and inconsistent regulatory enforcement.
A key concern raised in the report is the accumulation of significant unutilised and unaccounted funds within the sector. About US$434 million in Annual Budget Funding Amount (ABFA) remains locked in a suspense account, while an additional US$561 million from GNPC Explorco is yet to be properly accounted for, with transfers to the Petroleum Holding Fund reportedly delayed.
The Chamber also pointed to a mounting financial burden involving the Ghana National Gas Limited Company (GNGLC), which currently carries a debt exposure of around US$620 million. It warned that this creates a systemic risk that could destabilise the broader energy value chain.
Despite more than a decade of oversight by PIAC, the Chamber expressed concern over weak implementation of recommendations, noting that only about 32 percent of proposed reforms have been acted upon. It described this as a major governance gap undermining investor confidence and sector efficiency.
It further observed that no new petroleum agreements have been signed since 2018, a situation that has slowed exploration activities and weakened prospects for reserve expansion. As existing fields such as Jubilee and TEN continue to decline naturally, the absence of new projects raises concerns about future production sustainability.
The Chamber warned that without urgent intervention, Ghana risks entering a post-oil production decline phase, which could significantly weaken fiscal stability and economic resilience.
It also cautioned that continued inaction could increase sovereign credit risks, as shrinking petroleum revenues may limit the country’s ability to service energy-related obligations.
Domestically, delayed release of ABFA funds could stall critical infrastructure projects, including health and road initiatives, while unresolved debts in the gas sector could worsen power supply instability and lead to frequent outages and rising tariffs. The Energy Chamber concluded that fiscal discipline, improved governance, and renewed investment in upstream exploration are now essential to avoid long-term economic setbacks and safeguard Ghana’s position in the regional energy market.
