The Public Interest and Accountability Committee (PIAC) has observed that the country has been experiencing a constant decline in crude production for three consecutive years spanning from 2020 to 2023.
It notes that if nothing is done about it, Ghana will tread the path of losing a significant amount of oil revenue due to a consistent decline in crude oil production by the country’s oil fields.
The 2023 Annual PIAC Reports revealed that the country has been recording an average of 9.2% annual decline in production since 2020.
The situation has sparked concerns over a potential decline in the country’s oil proceeds which has become one of the backbones of the country’s economy.
That is, funds trickling into the country’s Petroleum Funds i.e the Ghana Stabilisation Fund and the Ghana Heritage Fund are on the verge of declining.
At a stakeholder workshop on declining production, PIAC identified the factors causing the trend to include the natural depletion of oil fields due to maturity, investment constraints caused by global energy transition, technical and operational challenges, and legal, regulatory, and fiscal challenges.
PIAC further mentions inadequate research collaboration between academia and industry and the downplaying of technical considerations in decision-making as part of the causes of the decline in production.
Parts of the communique issued after the workshop read that, ” having observed and reported in its 2023 Annual Report, the consistent decline of Crude Oil Production in Ghana from 2020 to 2023, and its likely adverse impact on petroleum revenue, its management, and investment” adding that there is the urgent need to address the situation.
Ghana heavily depends on the oil proceeds channeled into the Ghana Stabilisation and Heritage Funds. The failure to drastically address the situation will heavily impact the country’s funding of its annual budget while many infrastructure projects funded from the oil proceeds will experience significant setbacks.
Source:thehighstreetjournal.com