GHANA'S 15% PARTICIPATING INTEREST IN OIL EXPLORATIONS ABOUT TO BE REDUCED

The Petroleum Commission has indicated that it is considering a reduction in Ghana's 15% stake in oil exploration projects.

With the discovery of oil in several African nations, Ghana risks losing investments in the capital-intensive oil sector to competing countries.

The Chief Executive of the Petroleum Commission, Egbert Faibille Jnr, has called for reforms to the country's legal framework governing oil exploration.

Responding to concerns about Ghana's lack of progress in developing new oil fields, Faibille lamented the regulatory challenges faced by investors.

(CEO, Petroleum Commission, Ghana.
Egbert Faibille)

"The conversation around that sector is very, very, very commercial, regulatory and also investment related. And the reason is simple, to drill one offshore exploratory Well, a company will have to spend between about 50 to $70 million to be able to bring oil to the surface."

“So when an investor brings their money, GNPC will have to take 15% through exploration, right to production. So if you bring $1, know that 15% of that will never be gotten back.” He added.

He continued by saying that, 

“In our case, if you look at Section 10, I think sub section four, five thereof, of the petroleum exploration and production act of 2016, it says that in Ghana, the state's constituting interest is 15%”.

He believes this undermines the goal of positioning Ghana as an exploration hub in the sub-region.

He pointed out the growing trend across the African continent, explaining that 

“Ivory Coast, Angola, Nigeria, Guyana, and all the rest are hovering around a participating interest of 10% so if you go to the market with these competitors, if you're an investor, where would you want to go?” he quizzed.

He took the opportunity to urge the Minister of Energy and other relevant agencies to take steps to ensure Ghana remains competitive ahead of the Africa Oil Week conference, set to be held in Ghana in September 2025.

The conference will bring together key stakeholders from the oil and gas sector to foster partnerships and discuss the overall development of the industry.

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Source: myjoyonline