Assessing investment in Ghana's upstream oil and gas industry: The risk and returns

Abstract

The study sought to assess Investment in Ghana Upstream Sector, looking at the risk involved in the loss of Investment and the returns from the investment. The specific objectives were: to establish the level of investment in the oil and gas projects that are producing in commercial volumes in the Upstream sector of Ghana, to assess the revenues realized by Ghana and the IOCs from the sale of oil and gas since the start of commercial production in the year 2010. The researchers noticed that investors in the upstream sector face risk such as: price volatility risk, political risk, investment risk, and many other risks that affect the upstream operations. For the purposes of this study, risk is limited to investment risk. Thus, the researchers are looking at the level of investment in the upstream sector and whether the investment has any relation with the returns or revenues. A purposeful sampling technique was used to select the three commercial producing fields in Ghana for the Study. These are the Jubilee field, the TEN field, and the SGN field. Secondary data including oil and gas production volumes was taken from the annual reports of PIAC. Other secondary data was taken from Petroleum Commission, and Ministry of Finance. The results of the study showed that a total of about 8.8 billion US dollars was invested in the Jubilee field. About 4.998 billion US dollars and 5.2 billion US dollars was invested in TEN and SGN fields respectively. This means a total of about 19 billion US dollars was invested in the exploration and development of the three producing fields in Ghana. The results also indicated that despite all the risk in the upstream sector, about 22.69 billion US dollars revenues has been realized by the IOCs from the sale of oil and gas since the commencement of production in the year 2010. The results also showed that Ghana group realized about 4.98 billion US dollars from the revenues of oil and gas over the same period. Copyright © 2021, Society of Petroleum Engineers

Indexed Keywords

Engineering controlled terms: Economics, Gas industry, Gases, Gasoline, Investments, Petroleum prospecting, Risk assessment

Engineering uncontrolled terms: Commercial productionsExploration and developmentInvestment risksOil and gas productionOil and gas projectsPrice volatilitySampling techniqueUpstream oil and gas industry

Link

http://www.scopus.com/inward/record.url?eid=2-s2.0-85114126091&partnerID=MN8TOARS

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ISBN: 978-161399848-9

Source Type: Conference Proceeding

Original language: English

DOI: 10.2118/207172-MS

Document Type: Conference Paper

Publisher: Society of Petroleum Engineers

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