Ghana’s crude oil production has declined for six consecutive years, falling by almost 48% since its 2019 peak. This downturn has cost the country billions of US dollars in lost revenue, according to a new report from the Institute for Energy Security (IES).
The analysis from IES states that crude oil output decreased from 71.44 million barrels in 2019 to 37.30 million barrels by 2025. This significant reduction is described as a structural crisis. It stems from ageing oil fields, limited new investments in extracting oil (upstream investment), and the absence of new petroleum agreements since 2018.
This sustained fall in oil production directly impacts Ghana's national income, particularly government earnings from the petroleum sector. The Energy Commission projects output will fall further to 34.83 million barrels in 2026. This would extend the downward trend into a seventh consecutive year, further straining public finances. Ghana relies significantly on oil revenues to fund national development projects and manage its debt.
The IES report, authored by Smith Prosper Boahene and Prince Lumor, asserts that this decline is not a regular, temporary dip. Instead, it results from deep-rooted challenges in operations and policies. The report states, “The decline is not attributable to one shock, but to several structural, operational, and policy failures compounding over an unusually long period.”
The drop in oil production has severely affected the government's earnings from petroleum. Total petroleum receipts fell by 43.27% from US$1.36 billion in 2024 to US$770.27 million in 2025. This reduction resulted from lower production volumes and a fall in the average crude oil price from US$86.12 to US$74.93 per barrel. During the first half of 2025 alone, crude oil production fell by 26% year-on-year to 18.42 million barrels. Petroleum receipts simultaneously dropped from US$840 million to US$370 million in the same period.
The IES estimates Ghana missed out on over US$16.5 billion in potential gross oil revenue between 2019 and 2025. This estimate uses a hypothetical scenario where Ghana maintained modest annual production growth of 3%. Such growth would have required sustained drilling, new petroleum agreements, and improved management of oil reservoirs. Under this scenario, cumulative production would have exceeded actual output by approximately 221 million barrels.
Moving forward, policy makers will need to address the root causes of this decline. Key issues include the natural depletion of mature oil fields and insufficient replacement reserves. The failure to sign new petroleum agreements since 2018 is also a critical factor. The government’s ability to attract new investment and implement effective reservoir management strategies will be crucial. This will determine if Ghana can reverse this worrying trend and stabilize its oil revenues in the coming years. Any new policies or agreements will be closely watched by investors and market participants.