Upstream Petroleum – A High-Risk and Capital-Intensive Industry – Mr. David Ampofo

By Praisebell Rosemond Larbi

The Chief Executive Officer of the Ghana Upstream Petroleum Chamber, Mr. David Ampofo, has reiterated that upstream petroleum exploration and production is a highly capital-intensive venture that require billions of dollars in investment. Speaking on Zed FM’s I Have a Story to Tell program on Tuesday, April 1, 2025, he cautioned against using public funds meant for critical development projects such as hospitals, schools, and infrastructure to finance offshore oil and gas exploration.

According to Mr. Ampofo, petroleum exploration and production demand substantial financial resources due to the complexities involved in offshore drilling. He explained that this sector is inherently high-risk, as oil discovery is not always guaranteed, making it unsuitable for government financing using taxpayer money.

“Upstream petroleum exploration and production require billions of dollars in investment. Countries that engage in this do not use public funds to take such financial risks. Instead, they rely on private capital and international investors who are willing to bear the risks and reap the rewards if successful,” he emphasized.

He noted that many developed oil-producing nations, rely on private sector investment rather than government budgets to fund exploration and production activities. This approach ensures that essential public funds remain available for national development projects that directly affect citizens.

Mr. Ampofo cautioned that if Ghana were to divert funds meant for healthcare, education, and infrastructure into oil exploration, it could lead to severe economic consequences. He stressed the importance of ensuring that state resources are directed toward improving living conditions and social services rather than being channeled into speculative oil and gas projects.

“Oil exploration is uncertain—there are no guarantees of finding commercially viable deposits. The government has a responsibility to use public resources wisely, focusing on pressing needs such as building hospitals, improving schools, and providing essential infrastructure,” he stated.

He urged policymakers to adopt a long-term strategy that encourages private sector participation while ensuring that Ghana benefits from its oil resources without jeopardizing its developmental goals.

Mr. Ampofo called for stronger partnerships between the government and private investors to develop the petroleum sector. He explained that private capital brings not only financial investment but also technical expertise, innovation, and risk management strategies that improve the chances of successful oil exploration.

He further encouraged the government to create an attractive investment climate for multinational energy companies by ensuring transparency, enforcing regulatory stability, and providing incentives that make Ghana a favorable destination for oil exploration.

“By leveraging private sector investment, Ghana can develop its oil and gas industry without compromising its ability to fund critical national projects,” he added.

Ghana has emerged as a key player in Africa’s oil and gas industry following the discovery of major oil fields such as Jubilee, TEN, and Sankofa. However, the sector requires continuous investment to maintain production levels and explore new reserves. The government has been exploring ways to boost foreign direct investment in the sector while balancing national economic priorities.

Mr. Ampofo’s comments come at a time when debates on Ghana’s energy policies and resource allocation are gaining momentum. With rising global energy demands and fluctuating oil prices, industry experts continue to stress the importance of sustainable investment models that do not compromise the country’s developmental aspirations.

As the government considers future exploration projects, Mr. Ampofo insists that prioritizing strategic partnerships with private investors remains the most viable path for Ghana’s upstream petroleum sector.

While oil exploration presents significant economic opportunities, Mr. Ampofo’s insights highlight the importance of responsible financial decision-making. His call for private sector-led investment aligns with global best practices and ensures that Ghana can harness its natural resources without jeopardizing funding for essential public services. The conversation on how best to develop Ghana’s petroleum sector while securing national interests continues, and stakeholders will need to find a balanced approach that supports both economic growth and social development.