Ghana is pressing ahead with wide ranging reforms in its oil and gas sector as government seeks to revive investment, tighten governance and align petroleum development with the country’s long term energy transition agenda. The Ghana Extractive Industries Transparency Initiative (GHEITI) revealed these developments in its latest Oil and Gas Sector Reconciliation Report, which reconciles production and revenue data for 2023 while emphasizing current reforms shaping the sector’s outlook.
The report arrives at a critical juncture when declining output, fiscal pressures and global decarbonization trends are forcing a fundamental rethink of Ghana’s petroleum strategy. Government faces the dual challenge of attracting investment to reverse production declines while simultaneously positioning the sector to align with climate commitments and the global energy transition away from fossil fuels.
A key development centers on government’s ongoing review of the Petroleum (Exploration and Production) Act, 2016, known as Act 919. Investors have long raised concerns about Ghana’s fiscal terms, particularly the scope of carried interest obligations borne by contractors without reimbursement. These financial burdens have made Ghana less competitive compared to other oil producing nations in West Africa and globally.
According to GHEITI, the Ministry of Energy and Green Transition is working with the Attorney General’s Department, the Petroleum Commission and Ghana National Petroleum Corporation (GNPC) to revise the law. The goal is making the fiscal regime more flexible, predictable and competitive in a tightening global investment climate where capital flows increasingly favor jurisdictions offering better terms and lower regulatory uncertainty.
The reforms are being driven partly by approval of the Onshore Petroleum Exploration and Production Policy, 2024, which aims to unlock Ghana’s onshore sedimentary basins. The policy introduces a production sharing system for onshore operations, replacing the offshore style hybrid royalty tax framework that has governed the sector since commercial production began. This shift recognizes that onshore operations face different cost structures and risk profiles than offshore developments.
The onshore policy proposes overriding payments to support local content development, host communities, decommissioning and data acquisition. These provisions address concerns that petroleum wealth has not adequately benefited communities where extraction occurs, while also ensuring sufficient funding for eventual field closures and ongoing geological research. Legislative amendments are currently underway to align existing petroleum laws with the new policy framework.
Institutional clarity has emerged as another urgent priority requiring government attention. The GHEITI report highlights ongoing overlap between GNPC and Ghana National Gas Company over the national gas aggregator role, a situation that continues creating regulatory uncertainty and investor risk. Multiple entities claiming responsibility for gas market functions without clear delineation of authority undermines efficient sector governance.
GHEITI’s Multi Stakeholder Group (MSG) has renewed calls for government to formally clarify responsibilities between the two state owned enterprises. The MSG argues that stabilizing gas market governance and reducing policy ambiguity is essential for attracting investment into gas infrastructure and downstream utilization projects. Without clarity on which institution holds ultimate authority, investors face unnecessary legal and operational risks.
State participation and revenue assurance remain under intense spotlight following troubling findings in the reconciliation report. GHEITI reports that GNPC and its subsidiary Explorco have not paid corporate income tax on revenues from their interests in the Jubilee and TEN fields since 2021. The non payment stems largely from non compliance with ring fencing provisions designed to prevent cost pooling across different petroleum operations.
Addressing this corporate tax gap has become a priority as government seeks to protect public revenues amid fiscal consolidation and International Monetary Fund (IMF) supported reforms. The failure of state owned enterprises to meet tax obligations while private sector partners comply creates equity concerns and deprives the treasury of significant revenue. Government now faces pressure to enforce tax compliance across all operators regardless of ownership structure.
Environmental regulation is tightening significantly following enactment of the Environmental Protection Act, 2025, designated as Act 1124. The new law strengthens oversight of petroleum activities, including emissions control, waste management and decommissioning obligations. Petroleum operators will face stricter requirements for managing their environmental footprint throughout project lifecycles from exploration through eventual field abandonment.
Draft Environmental Protection (Petroleum) Regulations are being finalized to curb gas flaring, improve environmental permitting and strengthen emergency response frameworks across upstream and midstream operations. Gas flaring has remained a contentious issue in Ghana’s oil fields, with environmental advocates arguing that burning associated gas wastes valuable resources while contributing unnecessarily to greenhouse gas emissions. The new regulations aim to capture and utilize more gas rather than flaring it.
These regulatory changes coincide with Ghana’s broader energy transition push toward cleaner energy sources. Government has adopted the Ghana Energy Transition and Investment Plan, targeting net zero emissions by 2060, ten years earlier than previously projected. This ambitious timeline reflects international pressure on developing nations to accelerate climate action despite their relatively smaller historical contributions to global emissions.
The renaming of the Energy Ministry to the Ministry of Energy and Green Transition reflects this strategic shift in policy priorities. The name change signals government’s intention to balance continued petroleum development with expanding renewable energy deployment. Alongside this rebranding, initiatives such as renewable energy mini grids, smart solar street lighting and the proposed establishment of a Renewable Energy Authority demonstrate concrete steps toward diversifying Ghana’s energy mix.
To revive upstream activity that has stagnated in recent years, government has withdrawn earlier unitization directives that stalled exploration work across multiple blocks. Unitization requires operators from adjacent fields to coordinate development when reservoirs cross block boundaries, but premature directives before fully understanding reservoir characteristics can freeze activity. The withdrawal removes obstacles that prevented companies from advancing appraisal and development programs.
Government has reopened appraisal of discoveries such as Afina in the West Cape Three Points Block 2, which had been in limbo for years. Appraisal work determines whether discoveries contain sufficient commercial volumes to justify expensive development infrastructure. By clearing regulatory pathways, government hopes to encourage operators to invest in proving up additional reserves.
Memoranda of understanding have been signed with Jubilee and TEN partners to extend petroleum agreement timelines. These extensions provide operators additional time to fulfill contractual obligations without risking license termination, addressing concerns that rigid timelines discouraged investment when projects faced unforeseen delays. The flexibility helps maintain investor confidence while protecting Ghana’s interests in seeing discoveries developed.
Discussions are underway to construct a second gas processing plant to deepen domestic gas utilization and reduce reliance on crude oil exports. Ghana currently processes gas at the Atuabo Gas Processing Plant, but additional capacity would enable greater monetization of associated gas from oil fields. Increased domestic gas use for power generation could reduce electricity costs while generating employment and industrial development opportunities.
The reconciliation report itself demonstrates Ghana’s continued commitment to transparency in extractive sector governance. GHEITI’s annual reports reconcile payments from oil companies against revenues received by government, identifying discrepancies and ensuring accountability. The 2023 report confirmed that Ghana’s transparency and reconciliation systems remain robust, providing reliable data for policy decisions.
However, GHEITI concludes that while generating quality data is important, the insights now demand decisive action from government. Resolving fiscal and institutional ambiguities that have accumulated over years of incremental policy changes has become urgent. Enforcing state owned enterprise tax compliance without exception sends important signals about rule of law and equitable treatment of all sector participants.
Aligning petroleum development with climate commitments represents perhaps the most complex challenge facing policymakers. Ghana cannot simply abandon petroleum revenues that fund significant portions of the national budget, yet continuing business as usual contradicts international climate goals and risks stranding assets as global demand shifts. The policy balance requires maximizing value from remaining petroleum development opportunities while rapidly scaling renewable alternatives.
Critics argue that developing countries like Ghana should not bear equal responsibility for addressing climate change created primarily by industrialized nations. However, international climate finance and development assistance increasingly conditions support on recipient nations demonstrating commitment to energy transitions. Ghana’s accelerated net zero timeline likely aims partly to position the country favorably for climate funding access.
The report identifies several continuing challenges beyond those addressed by current reforms. Production from Ghana’s three producing fields has declined from peak levels, raising questions about reserve replacement and exploration success rates. New discoveries have not kept pace with depletion, and several high profile exploration wells have come up dry, dampening investor enthusiasm.
Licensing round outcomes have disappointed, with fewer bids submitted than anticipated and some blocks receiving no interest despite promotion efforts. Global trends favor jurisdictions with proven basins and established infrastructure, leaving frontier areas like Ghana’s deeper waters struggling to compete for scarce exploration capital. The fiscal reforms aim partly to overcome this competitive disadvantage.
Local content requirements, while important for maximizing Ghanaian participation in petroleum development, have sometimes increased costs and timelines. Finding the right balance between supporting domestic industry development and maintaining project economics that attract investment remains an ongoing policy challenge. The onshore policy’s local content provisions will test whether government has improved this balance.
GHEITI emphasizes that Ghana’s long term economic interests and intergenerational equity depend on getting petroleum governance right. Current revenues must be managed responsibly to benefit future generations who will inherit depleted resources. The reconciliation data provides essential accountability, but policy reforms and enforcement actions determine whether transparency translates into sustainable development outcomes.
The reforms reflect recognition that Ghana’s petroleum sector has reached an inflection point requiring strategic decisions about its future direction. Incremental adjustments will no longer suffice in addressing accumulated governance gaps, changing investment dynamics and the imperative of energy transition. Success requires coordinated action across multiple fronts simultaneously: fiscal reform, institutional clarity, environmental protection, tax enforcement and strategic planning.
Stakeholders across government, industry and civil society will watch closely whether ambitious reform agendas translate into implementation. Ghana has strong policy frameworks that often struggle with execution gaps. Demonstrating that this reform wave produces tangible improvements could restore confidence and unlock the investment needed to stabilize production and revenues during the transition period.
