Ghana searched for oil for decades before finding it in commercial quantities. In 1983, the PNDC government created a state company to lead that search and protect the nation’s interest in whatever was found. The Ghana National Petroleum Corporation, known as GNPC, waited more than twenty years for the breakthrough. When it came, with the Jubilee discovery in 2007, the company became central to the country’s economy.
Founding and Jubilee
GNPC was established by law in 1983 under the Provisional National Defence Council led by Jerry Rawlings. Its mandate was to promote exploration, develop petroleum resources and represent the state in partnerships with oil companies. Small oil discoveries had been made off Ghana’s coast, including the Saltpond field, which produced modest amounts. Major finds remained elusive for years.
In 2007, a group of companies including Kosmos Energy and Tullow Oil announced the Jubilee discovery off the Western Region. Production began in December 2010. GNPC held a stake in the field on behalf of the state.
Other fields, revenue and funds
Later developments included the TEN fields and the Sankofa-Gye Nyame project, which produces oil and gas. GNPC holds interests in these too. Ghana’s petroleum revenue is managed under the Petroleum Revenue Management Act of 2011, which sets rules for how oil money is shared between the budget, savings funds and GNPC. The law created the Ghana Stabilisation Fund and the Ghana Heritage Fund, intended to cushion the budget and save for future generations.
Controversies, local content and gas
GNPC has faced criticism over spending, investments and contracts. The Public Interest and Accountability Committee, created by law, reports on how petroleum revenue is used. Ghana’s local content rules aim to ensure Ghanaians benefit through jobs and contracts in the oil industry. Progress has been mixed. GNPC also plays a role in the gas sector, supplying gas to power plants and working with Ghana Gas.
The future and new blocks
Oil production from existing fields is expected to decline over time without new discoveries. GNPC has been involved in efforts to attract fresh investment. Ghana divides its offshore and onshore areas into blocks that are offered to oil companies for exploration. GNPC negotiates and holds a carried interest in these agreements, which gives the state a share of any discovery.
GNPC was created for a resource Ghana did not yet have. Its challenge now is making sure the oil that was finally found leaves something lasting behind.
