Ghana’s overdependence on imports of petroleum products is expected to decline to the barest minimum, as the country’s vision of setting up a petroleum hub with US$60 billion in the region gains momentum.

Currently, Ghana’s consumption of petroleum products ranges from 90,000-100,000 barrels per day, nonetheless, the country’s sole refinery (Tema Oil Refinery) suffers gross inefficiencies and inadequacies. As a result, Fitch Solutions has considered the petroleum hub project to be high risk due to the existing dynamics across Ghana’s downstream sector.

The cost of the project, pegged at US$60 billion will remain the biggest investment ever committed to the petroleum sector. This would also mark one of the largest oil and gas investments ever across the whole of SSA.

The country’s refined fuel consumption is likely to increase to 2.3 percent year-on-year growth in demand over the long-term, to reach 112,330b/d by 2030, based on estimates by Fitch Solutions.

According to Fitch Solutions, Ghana’s refining capacity has the prospect of increasing by 600,000b/d when the project comes online by 2030, thus offering substantial competition for Nigeria’s refining sector.

Whether importers of petroleum products in the SSA region will be ready to accept exports of the country’s refined petroleum products once the petroleum hub project comes online remains uncertain. As some countries in the region are going ahead to look for alternatives in clean energy sources such as renewable energies. For instance, Namibia and Rwanda to mention a few.

Currently, major oil exporters in the region such as Nigeria are facing declining oil revenues as a result of the global campaign of climate change. And in the coming years, these calls may heighten further as sanctions on oil importation keep gaining traction in certain jurisdictions.

Government appoints governing body of petroleum hub

Following the completion of phase one of Ghana’s petroleum hub project which included preparations of spatial plans for the project, earlier this year, the President, with approval of the Council of State has moved to constitute the governing body for the Petroleum Hub Development Corporation (PHDC).

This is in line with section 14 (1) of the Petroleum Hub Development Corporation Act, 2020 (Act 1053). Meanwhile, the governing body is expected to be sworn in by the Minister for Energy, Dr Mathew Opoku Prempeh in the next couple of days, according to sources.

The PHDC governing body comprises Awulae Annor Adjaye ll, President’s nominee; Mr. Charles Owusu, CEO of the PHDC; Mr. Kwame Asante Nsiah, Representative of the Free Zone Authority; Mr. Humphrey Ayim Darke, Representative of the Association of Ghana Industries; Mr. Senyo Kwasi Hosi, Representative of the Chamber of Bulk Oil Distributors.

The others are Mr. Yaw Agyemang-Duah, an expert in the downstream Petroleum Industry; Mr. David Ampofo, Representative of Ghana Upstream Petroleum Chamber; Maame Ofewah Sarpong and Hon. Samuel Erickson Abakah, both being nominees of the President on the Board.

While there are good prospects that Ghana stands to gain from the project, as the other two phases of the project are still pending, the new board that will be sworn in soon must be forward-looking in their decisions.

Considerations must also be given to the current global context within which the project is situated in order to reduce the imminent risks ahead.