ENERGY, OIL AND GAS
DEVELOPMENT
Consultative Group Meeting
September 23, 2010
THE POLICY CONTEXT
• Energy and related services play a major role in
facilitating socio-economic development.
• Recent discovery of oil and gas has also heightened
expectations for remarkable improvement in the
pace of national development.
• However, the expectation of Oil and Gas to propel
Ghana forward can be seen as a means to national
development rather than an end.
• The Policy Direction therefore seeks to harness the
transformational opportunities presented by the
discovery of oil and gas to industrialize Ghana.
KEY FOCUS AREAS OF THE SECTOR
The key focus areas of the Energy, Oil
and Gas sector in the GSGDA-1 are:
•Diversification of the Economy.
•Employment Creation.
•Protecting the Environment.
•Revenue Management.
•Capacity Development.
•Increasing access to Petroleum Products and
electricity; and
•Pricing to support development priorities.
OIL & GAS POLICY PRIORITIES
The following will be the sector policy priorities:
• Synergies and Linkages with other sectors of the
economy;
• Generating resources that can be used for a
rapid development of national infrastructure;
• Increasing agricultural productivity;
• Enabling a paradigm shift in the structure of the
economy toward increased gas-driven industrial
value-added production;
• Accelerating job creation and facilitating the
building of national capacity to harness advanced
technologies to support industrial development.
POWER SECTOR POLICY PRIORITIES
• The Policy Goal is to achieve significant improvements in power
generation levels, and transmission and distribution infrastructure
to meet local demand growth at 10% per year as well as regional
demand for power, to restore Ghana’s position as a major exporter
of power in the sub-region by 2015.
• This will be achieved through
– capacity addition, rehabilitation and modernisation of the
transmission and distribution infrastructure.
– increase in installed power generation capacity quickly from
about 2,000 MW at present to 5,000 MW by 2015.
– increased electricity access from the current level of 67% to
universal access by 2020.
– pursuit of further Power Sector Reforms to facilitate private
investment.
POLICY OPPORTUNITIES
• The broad policy thrust is to use opportunities arising from
oil and gas industry as a catalyst to diversify the economy to
create jobs in other sectors, with incentives for investments
along the industry value chain to expand its impact.
• It also aims to prioritise the use of oil revenue for education,
health, agriculture, infrastructure, rural development, water,
sanitation and poverty reduction.
• Make gas available for domestic utilisation and industrial
value creation;
• Prioritize availability of gas for power generation to meet
domestic needs and export to sub-regional markets.
• Expand Ghana’s oil refining and power generation and
transmission and distribution capacity.
POLICY CHALLENGES
• Gas-driven industrial development requires early decisions on gas
development, and prioritizing off-take and pricing regime to signal
potential investors.
• The Power sector is also hampered, among others, by poor
transmission and distribution infrastructure, volatility of Volatility of
hydro-generation, high cost of fuel for thermal, and inadequate
access in some areas.
• Also, while expectations are high for the oil and gas industry to
employ many Ghanaians, the capacity to create jobs in the sector is
limited and jobs are highly technical.
• Moreover, diversification of the economy also requires crosssectoral approach which is currently lacking, as well as conscious
build-up of Ghanaian human resource capacity in the oil and gas
sector to drive targeted linkages.
MOBILIZATION OF INVESTMENT FOR
ENERGY SECTOR DEVELOPMENT
• Energy infrastructure requires big investments.
• The Policy will therefore encourage investment
from the private sector to complement public
investment.
• In some contexts, private investors will require a
framework of a public-private partnership (PPP),
with the State perhaps providing special
support.