Ghana has been ranked fifth (5th) on Fitch Solutions’ Downstream Oil & Gas Risk/Reward Index out of nineteen (19) Sub Saharan African countries with weak downstream oil sector.
Ghana was also ranked 57th globally out of 92 nations as the country’s $60 billion Petroleum Hub Development project has been described as overambitious by Fitch Solutions.
Although Ghana scores slightly higher than the regional average, it’s limited refining capacity and low utilization rates, combined with its under-developed regulatory framework, mark it as an unattractive area for private investments resulting to low production,” noted Fitch in its ranking.
“If the necessary funding for the Petroleum Hub Development can be obtained, the project offers significant upside to Ghana’s RRI [Risk Reward Index] position and the future of its downstream sector,” Fitch added.
Meanwhile Parliament in October 2020, passed the Petroleum Hub Development Corporation Bill which will establish the Petroleum Hub Development Corporation and subsequently fuel the growth of the country’s downstream sector.
It is expected to incorporate four refineries, crude oil storage tanks and two petrochemical plants.
The integrated petroleum hub will be built in Bonyere in Western Region and will be constructed in three phases. It is expected to be completed by 2030.
But Fitch Solutions considers the project as a high risk given the existing dynamics across the nation’s downstream sector with limited demand for refined fuel citing the Tema Oil Refinery as an example.