Ghana courts ExxonMobil, Shell and Chevron in six-deal push to lift oil output

Ghana is courting ExxonMobil (NYSE:XOM), Shell (LSE:SHEL) and Chevron (NYSE:CVX) as it seeks to conclude at least six petroleum agreements by March 2027 and build on a recovery in crude oil production after six years of decline.

The government is targeting fresh exploration investment after annual output nearly halved between 2019 and 2025. The planned agreements would add to $3.5bn in previously announced upstream investment commitments whose full expenditure and production effects have yet to be realised.

Energy and Green Transition Minister John Abdulai Jinapor said negotiations were progressing with Eni (BIT:ENI), privately held Vitol, Shell, Chevron, Petrobras (NYSE:PBR) and ExxonMobil, according to Citi News.

Speaking at the Petroleum Commission’s Local Content Conference and Exhibition in Takoradi on November 10, Jinapor said Ghana was seeking to attract exploration capital through greater regulatory predictability, policy certainty and more competitive commercial terms.

President John Mahama said three memoranda of understanding covering preliminary terms for prospective petroleum blocks had already been signed. Eni and Vitol signed two of them in September, covering two offshore blocks in the Tano Basin. The commercial terms have not been disclosed, and the MoUs are separate from binding petroleum agreements.

The third was signed by Shell and Chevron on September 1, covering the South Deepwater Tano Cape Three Points block, which contains the Nyankom oil discovery. Petrobras is separately negotiating exploration contracts for four blocks in the Keta Basin, IntelliNews reported. Ghana Investment Promotion Authority chief executive Simon Madjie said in October that there had been talks for ExxonMobil to return to Ghana.

The investment drive follows $3.5bn in commitments announced in 2025 and set out by the finance minister in November, comprising a $2bn framework associated with the Jubilee and TEN fields and a $1.5bn memorandum of intent involving Offshore Cape Three Points (OCTP) partners.

Mahama reaffirmed the commitments on November 10, saying they would support new wells, subsea infrastructure and expanded production facilities. The government has not disclosed a comprehensive expenditure schedule establishing how much of the commitments has been spent.

Ghana’s oil recovery faces a critical test

Ghana’s annual crude production fell from a peak of 71.44mn barrels in 2019 to 37.3mn barrels in 2025, a decline of 47.8%, according to the Public Interest and Accountability Committee (PIAC). Output contracted for six consecutive years as ageing fields, reservoir depletion, operational disruptions and insufficient replacement investment constrained production.

The Energy Commission’s February 2026 outlook had forecast annual output falling another 6.6% to 34.83mn barrels this year.

Jinapor said in October that output had risen by about 30% this year, Graphic Online reported, and on November 10 put the recent production rate at about 122,700 bpd, against an average of about 102,000 bpd in 2025. Mahama said output had recovered to more than 120,000 bpd from a low of about 88,000 bpd, NewsBase reported. Measured by volume, Petroleum Commission data show first-half 2026 production of 20.58mn barrels, up 11.7% year on year.

Tullow Oil (LSE:TLW, GSE:TLW), operator of Jubilee and TEN, has secured a rig for a drilling campaign expected to begin around mid-2027. The programme comprises five firm wells and five optional wells, supported by updated seismic and reservoir data.

Tullow completed its previous drilling campaign in September 2026, bringing six Jubilee production wells and one water-injection well onstream. Its petroleum agreements covering Jubilee and TEN were extended to December 31, 2040, following parliamentary ratification in February.

Beyond existing production, Ghana is prioritising the Eban-Akoma discoveries, the Pecan development and deepwater exploration prospects in the Keta Basin.

Eban-Akoma was formally declared commercial in July 2025, allowing its partners to advance towards a development plan.

A separate gas and condensate discovery at the Nya Gyidie-1X well in the Deepwater Cape Three Points block, announced on November 10, has opened another exploration prospect. Operator Planet One Oil & Gas holds 75%, with the Ghana National Petroleum Corporation (GNPC) on 15% and GOIL Upstream, a subsidiary of GOIL PLC (GSE:GOIL), on 10%, Graphic Online reported. ExxonMobil held the block before giving up its interest in 2021.

The well was drilled approximately 148 km offshore in water depths of 2,289 metres. GNPC said the discovery was Ghana’s first successful test of a carbonate reservoir system as a primary exploration target, beyond the sandstone formations associated with the country’s established commercial fields.

GNPC chief executive Kwame Ntow Amoah said further technical evaluation was needed to determine the discovery’s scale and commercial potential. No commercially recoverable reserves have yet been established from the well.

Fiscal reforms and Tullow tax dispute

Ghana’s investment drive is accompanied by proposals to revise its Petroleum (Exploration and Production) Act, 2016, including a royalty structure linked to water depth and a reduction in GNPC’s initial carried interest from 15% to 10%.

Other proposed changes include extending petroleum agreements from 25 to 30 years, increasing the tax-loss carry-forward period from five to 10 years and replacing upfront signature bonuses with payments linked to commercial discoveries.

The proposals remain subject to legislative approval and are intended to improve Ghana’s competitiveness in deepwater and frontier exploration.

The government’s handling of a tax arbitration dispute involving Tullow presents another test of relations with established international operators.

In September, an International Chamber of Commerce tribunal ruled that Ghana’s $196.5mn corporate income tax assessment on business interruption insurance proceeds received by Tullow between 2016 and 2019 did not breach the company’s petroleum agreements.

The tribunal also found that penalties equivalent to 100% of the assessment fell outside the agreements’ contractual protections, taking Ghana’s total claim to about $393mn, according to the Ghana Revenue Authority.

Tullow shares fell by about half following the September 30 announcement, reflecting the financial implications for a company heavily dependent on cash flows from Ghana. Canaccord Genuity analyst Charlie Sharp described the outcome as “very disappointing”.

Mahama said on November 10 that the government and Tullow had agreed on a mutually acceptable roadmap for implementing the ruling while preserving operations and investment.

The terms of the roadmap have not been disclosed, and the talks are also expected to cover a separate dispute over a $190.5mn assessment on Tullow’s intercompany loan interest for 2010–2020, whose arbitration hearing has been postponed to 2027, NewsBase reported. Tullow described discussions with the government as continuing, Bloomberg reported on November 12.

Gas investment offers savings but financial risks persist

Natural gas is another focus of the government’s investment campaign, with revised commercial arrangements intended to increase domestic supply while lowering costs for electricity generation.

Under renegotiated arrangements with Eni and its OCTP partners, the government expects the average gas price to decline by 23%, generating projected savings of approximately $3.5bn over the remaining life of the field.

Separate arrangements for Jubilee gas are expected to reduce average prices by about 18%, with estimated savings of $300mn.

The figures are government forecasts rather than realised savings and depend on future production, contracted deliveries, prices and the implementation of commercial arrangements.

Ghana also plans to develop another gas processing plant, with Jinapor targeting a groundbreaking ceremony in December. Project implementation remains dependent on the necessary financing, approvals and construction arrangements.

The International Monetary Fund (IMF) estimated that net payables to independent power producers and fuel suppliers stood at approximately $1.7bn at the end of 2025, compared with a peak of about $2.2bn earlier that year. The stock remained around $1.7bn at the end of March 2026 despite government payments and debt restructuring.

The IMF identified distribution losses, incomplete bill collection and costly generation contracts as continuing sources of financial pressure.

Local content

Jinapor said Ghanaians accounted for approximately 90% of the upstream workforce, while the value of services provided by indigenous companies increased from $227.5mn in 2024 to $451.8mn in 2025, a rise of nearly 99%.

The government wants future petroleum agreements to expand domestic participation through technical training, technology transfer and greater access to industry contracts for Ghanaian companies.

See IntelliNews: Ghana reports 30% rise in oil output amid $2bn investment drive
See IntelliNews: Tullow shares slump after Ghana tax ruling raises $393mn exposure