Ghana’s crude oil production has declined for six consecutive years, falling by nearly half since its 2019 peak and costing the country billions of dollars in lost revenue, according to a new report by the Institute for Energy Security (IES).
The analysis, authored by Smith Prosper Boahene and Prince Lumor, describes the prolonged downturn as a structural crisis driven by ageing oil fields, limited upstream investment and the absence of new petroleum agreements since 2018.
According to the report, crude oil output fell from 71.44 million barrels in 2019 to 37.30 million barrels in 2025, representing a decline of almost 48%. The Energy Commission projects production will fall further to 34.83 million barrels in 2026, extending the downward trend into a seventh consecutive year.
The report argues that the decline is “not a routine cyclical dip” but the result of deep-rooted operational and policy challenges.
“The decline is not attributable to one shock, but to several structural, operational, and policy failures compounding over an unusually long period,” the report stated.
Petroleum revenues tumble
The production slowdown has significantly affected government earnings from the petroleum sector.
IES said total petroleum receipts dropped by 43.27% from US$1.36 billion in 2024 to US$770.27 million in 2025. The decline was attributed to lower production volumes and a fall in the average realised crude oil price from US$86.12 to US$74.93 per barrel.
During the first half of 2025 alone, crude oil production declined by 26% year-on-year to 18.42 million barrels, while petroleum receipts fell from US$840 million to US$370 million.
The report also estimates that Ghana missed out on more than US$16.5 billion in potential gross oil revenue between 2019 and 2025.
Using what it describes as an “illustrative counterfactual”, IES modelled a scenario in which Ghana maintained a modest annual production growth rate of 3% through sustained drilling, new petroleum agreements and improved reservoir management.
Under that scenario, cumulative production would have exceeded actual output by about 221 million barrels.
Ageing fields and lack of new investment
The report identifies natural depletion of mature oil fields, insufficient replacement reserves and the failure to sign new petroleum agreements since 2018 as the principal causes of the production decline.
Ghana’s oil production remains concentrated in three offshore fields—Jubilee, TEN and Sankofa Gye Nyame.
Although Jubilee remained the country’s largest producing field in 2025 with 22.2 million barrels, it also recorded the sharpest year-on-year decline of more than 30%, partly due to a planned production shutdown between March 26 and April 8.
IES noted that the temporary increase in production recorded in 2024 following drilling under the Jubilee South East project demonstrated that targeted investment can slow production decline.
The report added that while COVID-19 disruptions worsened the downturn in 2021, the decline had already begun before the pandemic.
“COVID-19 aggravated an already-declining trend rather than starting it,” the report noted.
Energy security concerns
IES warned that the sustained production decline has implications beyond the upstream petroleum sector.
It said revenues to the Ghana National Petroleum Corporation (GNPC) declined by more than 61%, compounded by a policy decision that reduced GNPC’s share of petroleum revenues from 30% to 15%.
The report also cited findings in the Public Interest and Accountability Committee’s (PIAC) 2025 Annual Report, which highlighted rising cash-call obligations on the TEN field alongside US$561.65 million in petroleum revenue linked to GNPC subsidiary Explorco that remains unaccounted for.
According to IES, falling crude production also threatens domestic gas supplies used for thermal power generation, increasing Ghana’s dependence on imported fuels and exposing the economy to exchange rate volatility and global energy price shocks.
Petroleum revenue contributes about 10% of total government income and supports key public infrastructure and national development programmes.
Government outlines recovery measures
The Ministry of Finance acknowledged the production decline in the 2026 Budget Statement, noting that average daily oil production had fallen from around 200,000 barrels per day in 2019 to approximately 150,000 barrels per day in 2025.
To reverse the trend, the government says it has secured more than US$3.5 billion in investment commitments.
These include a US$2 billion framework to drill 20 additional wells in the Jubilee and TEN fields and a US$1.5 billion Memorandum of Intent with partners in the Offshore Cape Three Points block.
GNPC also plans to begin drilling activities in the Voltaian Basin from October 2026.
Government is further reviewing upstream fiscal and regulatory frameworks to attract fresh investment from international oil companies, including Shell.
Parliament has also ratified extensions to Tullow Oil’s petroleum agreements covering the West Cape Three Points and Deep Water Tano blocks, allowing operations at the Jubilee and TEN fields to continue until December 31, 2040. The agreements also provide for GNPC to increase its stake in the fields by 10% from July 20, 2036.
The administration of President John Dramani Mahama has additionally announced measures to restore investor confidence, including the settlement of legacy energy-sector debts and renewed efforts to stimulate upstream petroleum investment.
Calls for urgent reforms
IES is urging government to resume the negotiation and signing of new petroleum agreements through transparent and competitive licensing rounds while accelerating implementation of the planned drilling programme.
The think tank also wants Parliament and PIAC to closely monitor progress on the US$2 billion investment programme and has called for reforms to strengthen GNPC, including resolving the outstanding US$561.65 million linked to Explorco and reviewing the reduction in GNPC’s petroleum revenue allocation.
Meanwhile, the Africa Sustainable Energy Centre (ASEC) has cautioned against plans to invest petroleum funds in domestic gas and power infrastructure, warning that the move could weaken the funds’ role as a foreign exchange stabilisation mechanism and worsen Ghana’s estimated US$14 billion energy-sector debt.
Financial economist Professor Lord Mensah has also attributed the sharp decline in petroleum revenues to inconsistent fiscal and investment policies, urging government to channel oil revenues into infrastructure development, agriculture and export-led economic diversification.
IES concluded that Ghana’s prolonged decline in oil production requires urgent policy action.
“Ghana’s six consecutive years of crude oil production decline are far more than a cyclical fluctuation. The data show a structural crisis… Reversing it will require new licensing, accelerated investment, improved operational efficiency, strengthened institutional capacity, and diversified revenue management, implemented with the urgency the data clearly demonstrate is overdue,” the report said.
