Ghana's 15% participating interest in oil explorations to be reduced-Petroleum Commission

The Petroleum Commission is considering reducing Ghana's 15% stake in oil exploration projects to enhance the country's appeal to investors.

With the emergence of oil production in various African nations, Ghana risks losing its competitive edge in the capital-intensive oil sector. 

Egbert Faibille Jnr, the Chief Executive of the Petroleum Commission, has emphasized the need for legal reforms to address challenges within the industry.

Responding to concerns about the lack of new oil fields in Ghana, Faibille highlighted the regulatory barriers that deter potential investors.

"The oil exploration sector is heavily influenced by commercial, regulatory, and investment considerations. To drill a single offshore well, companies must invest between $50 million and $70 million just to extract oil," he explained.

He noted that under Ghana's current framework, the Ghana National Petroleum Corporation (GNPC) secures a 15% stake in projects, stretching from exploration through production. "If an investor brings $1, they should know 15% of that amount will not be recovered," he added.

Faibille pointed to Section 10, subsections 4 and 5, of the Petroleum Exploration and Production Act, 2016, which mandates 15% state participation. 

He argued that this policy undermines Ghana’s efforts to position itself as a leading exploration hub in the region.

Comparing Ghana's stake to other nations, he noted, "Countries like Côte d'Ivoire, Angola, Nigeria, and even Guyana offer a participating interest of around 10%. Given these options, where would an investor prefer to go?"

Faibille urged the Ministry of Energy and other stakeholders to prioritize Ghana's competitiveness in the lead-up to the Africa Oil Week conference, scheduled for September 2025 in Ghana.