Steve Manteaw calls for regulatory stability to revitalize Ghana’s oil sector

Co-chairman of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr. Steve Manteaw, has called on the government to provide some predictability to the regulations governing the activities of companies in the petroleum sector.

According to him, entities operating in the industry are increasingly concerned about frequent changes in regulations, which disrupt their planning and discourage investments.

Dr. Manteaw emphasized that these regulatory issues affect the development of the sector and displace oil companies that consider conditions unfavorable.

Speaking to PM Express JoyNews, Dr Manteaw said: “Every year we change the rules. We introduce new fiscal positions that then disrupt the financial planning of these companies.

“There have been complaints again about the rather capricious application of our regulations. I think these are matters known to the government.”

He stressed that although many oil companies have stability clauses, new rules are still being enforced, forcing them to comply with them.

“I know that many of them resisted and continue to resist. However, this creates some discomfort for them and therefore limits their appetite for investment,” added Dr. Manteaw.

Despite efforts by the Ministry of Energy and the Ghana National Petroleum Corporation (GNPC) to attract investment from around the world, this regulatory unpredictability is deterring potential investors, he said.

This comes after a PIAC report revealed that in 2023, Ghana’s crude oil production declined for the fourth consecutive year.

Shedding light on developments in the upstream oil sector, the report indicates that crude oil production has declined “from a high of 71.44 million barrels in 2019 to 48.25 million barrels in 2023.”

This represents an average annual decline of 9.2%.

Of the 48 million barrels, 63% came from Jubilee Fields, 23% from SGN and 14% from TEN.

“In 2023, the three producing fields produced a total of 48,247,036.61 barrels (bbl). Jubilee – 30,444,217 bbl (63%); TEN – 6,716,278 bbl (14%) and SGN 11,086,541.61 (23%).”

Meanwhile, Dr. Manteaw warned that if action is not taken to rectify the situation, Ghana may not have an oil industry in the next 15 years.

“I know that GNPC is making efforts to attract investment into our oil industry. But investments are not coming. Sometimes I feel like we’re just throwing money away. Investments are not coming for obvious reasons.”

He cited the information about ExxonMobil’s exit from the oil industry in Ghana due to the small size of exploration blocks and the insufficient number of discovered oil deposits.

“If we had bigger blocks, there would be a better chance of finding oil in adequate quantities. That would generate interest.”

Dr. Mantaew added that the lack of adequate and quality data also affects Ghana’s chances of finding investors. He said that although the government was aware of the problem, little had been done to address the situation.

Moreover, “We live in an era of energy transformation, in which developed countries and the largest oil companies are starting to abandon fossil fuels in favor of renewable energy.

“For example, the EU has introduced a program called the EU Taxonomy Program, which aims to discourage investment in fossil fuels and encourage investment in renewable energy.”

“If you go to the EU to take part in a roadshow, there is a high probability that you will return home empty-handed. This was indeed the case with some roadshows organized by GNPC,” he noted.

In light of these challenges, Dr. Manteaw urged the government to provide regulatory predictability to companies in the country and increase exploration block sizes to improve production.

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