Oil: Ghana tops in sub-Saharan Africa

Ghana was ranked number one in sub Saharan Africa in terms of risks versus rewards in the oil and gas industry, the Industry Risk/Reward Index - Upstream Oil & Gas report has revealed.

The country also placed 17th globally and was ranked high in all the four criteria which were industry reward, country reward, country risk and industry risk. The report said Ghana is the regional outperformer, profiting from relative political stability, an open and competitive domestic market and strong prospectivity below ground.

“Ghana is the regional outperformer in our Upstream Risk/Reward Index, with a strong Rewards profile combining with
a relatively low level of risk”, it added.

Angola and Nigeria sit towards the top of the regional index, in fourth and second place, respectively. Nevertheless, they significantly underperform their potential, ranking 51st and 29th globally. Both hold a large oil reserves base, but challenging political and security environments and chronic underinvestment has begun to curtail exploration and production growth outlooks.

Mozambique has emerged as a relative bright spot in SSA, positioned third in the Upstream RRI. Its performance has been underpinned by a large offshore gas resource base and incremental legal and regulatory reform.

The region's underperformers - including Chad, Sudan and South Sudan - typically boast large resource bases, the report reiterated. However, pervasive insecurity has derailed exploration and production efforts, while operational, political and economic risks are critically high. “Risks are elevated across the region due to chronic political and economic instability and challenging operational environments. This is only partly offset by a strong Industry Rewards showing, supported by a high discovery rate and substantial oil reserves and production”, the report further stated.

The report added that sub-Saharan Africa's upstream, despite a large discovered resource base and significant production potential, continues to be dogged by weak Country Risk profiles, which drag on the region's overall Risk/Reward Index (RRI). The region is the global underperformer with an overall upstream RRI score of 40.5 out of a possible 100.

There are presently 16 countries in Sub Saharan Africa that produces oil. These include South Africa, Tanzania and Ethiopia.

Presently, oil is trading US$69.79 per barrel on the world market. Ghana earned US$3.03 billion from oil exports in 2017, compared with US$1.34 billion in 2016.