Fitch bullish about Ghana’s upstream sector as it forecasts 5% increase in crude oil production for 2024

Fitch Solutions says it is bullish about Ghana’s upstream petroleum sector as it anticipates a 5% increase in crude oil production for this year – 2024.

According to the research firm, this is mainly contingent on the Pecan oil field reaching Final Investment Decision (FID) this year. Tullow Oil’s extensive drilling campaign at Jubilee and TEN is also expected to contribute to the 5% growth in oil production.

The 5% increase in oil production implies that Ghana will be producing some 177,120 barrels of oil per day.

Our expectation for oil production remains bullish but contingent on Pecan reaching FID this year. Following operational setbacks in 2023 that led to a significant decline in production from the Jubilee and TEN fields, we project a rebound in oil production growth in 2024, with an anticipated increase of 5.0% to 177,120 barrels per day (b/d). This recovery is expected to be driven by Tullow Oil’s extensive drilling campaign at Jubilee and TEN,” quipped Fitch Solutions.

The complications experienced in the Jubilee and TEN fields in 2023 were particularly damaging, with production in the first half of the year dropping significantly compared to the same period in 2022 (12.0% at Jubilee and 17.5% in TEN).

Issues such as flow assurance problems, reduced water injection, and temporary halts in well operations were to blame. Although these issues have since been resolved, they led to estimated declines of 9.5% in crude and condensate production in 2023.

Fitch Solutions, however, notes that a temporary plateau is foreseen after the 5% surge until Pecan starts production, which is not expected until 2027 at the earliest.

Adding that, if Pecan’s FID is confirmed by the end of 2024, it foresees Ghana’s oil production reaching its peak at 238,980 b/d in 2029.

This projection is cautious, considering the persistent historical delays in Pecan’s FID over the past three years. While drilling will pause in 2024, it is slated to resume and conclude in 2025, suggesting continued investment in and development of Ghana’s oil production capabilities,” it further stated.