Ghana’s crude oil, Natural Gas Liquids and other liquids production are expected to slightly recover in 2022 by 2 per cent, following a weak performance in 2021, according to Fitch Solutions.

This is buoyed by the ongoing multi-well drilling campaign at the Jubilee and TEN fields, which is to help offset production declines from Ghana’s oil fields over the near-term.

According to Fitch, the anticipated development of the 110,000 barrels per day (b/d), Pecan field holds the key to the country’s oil future- which is expected to start up in 2025, though risks to this timeline lie to the downside.

In addition, Eni’s significant oil find from the Eban-1x well in the Cape Three Points (CTP) Block 4, which holds an estimated potential of between 500 and 700 million barrels of oil equivalent (boe), provides upside risks to the country’s oil production in the long term.

Tullow’s ‘Value Maximization Plan’ with which it intends to make an investment of over US$4 billion over the next decade, delivering over 50 wells is a positive development. For the country’s oil industry, this commitment bodes well.

“Ghana will see modest growth of natural gas production, driven by non-associated gas from the Sankofa/Gye Nyame fields, as well as maintenance and improvements from Jubilee and TEN fields.”
Fitch Solutions

Refined Fuel consumption to Rise

Ghana is expected to register positive growth of 3.0 per cent in its refined fuels consumption over 2022, to reach 96,800b/d, owing to upbeat GDP growth prospects and a recovery in private consumption. With the rise in consumption fueling growing demand for imports of petroleum products- which has implications on the country’s currency- this may come at a huge cost to the country.

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. The country’s sole refinery, Tema Oil Refinery (TOR) continues to struggle with gross inefficiencies and inadequacies with no sign of revival coming into 2022.

That aside, the Petroleum Hub Development project offers significant upside to the country’s downstream sector. The Project which costs US$60 billion is expected to be the biggest investment ever committed to the petroleum sector, however, Fitch doubts the project’s feasibility, with bearish sentiments clouding outlook.

Fundamentally, whether importers of petroleum products in the sub-Saharan Africa 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.

Contrary to Fitch’s positive outlook for crude, Albert Longdon-Nyewan, head of production at the Ghana National Petroleum Company is cited to have projected a decline in terms of crude output. According to him, crude output will drop to about 146,500 barrels per day (b/d) in 2022 from 150,000 b/d after COVID-19 restrictions slowed development activities.

That notwithstanding, expectations are that drilling and completion of wells will be expanded to five or six wells next year from four wells this year, helping production to rebound back to 2020 levels in 2023.

The future of the country’s petroleum sector is faced with mixed sentiments, as countries have begun imposing travel bans due to the spread of the Omicron variant, and this will be one of the main themes in 2022. Sector players should be forward-looking, so as to factor this also into production rounds entering into next year.