1. Information on Ghana
Reserves Production Consumption Exports Imports
(bbl) (bbl/day) (bbl/day) (bbl/day) (bbl/day)
7,571 49,300 5,709 45,520
15,000,000 1 Jan 2007 2006
Ghana Rank: Rank: Rank: 2005 Rank: 2005
Rank: 84 2008 est. est. est.
86 89 92 78
Oil reserves in Ghana
Commercial quantities of offshore oil reserves in Ghana were discovered in the 1970s, by 1990 production
was still negligible. In 1983 the government established the Ghana National Petroleum Corporation (GNPC)
to promote exploration and production, and the company reached agreements with a number of foreign firms.
The most important of these permitted US-based Amoco to prospect in ten offshore blocks between Ada and
the western border with Togo. Petro-Canada International had prospected in the Tano River Basin, and
Diamond Shamrock in the Keta Basin. In 1989 three companies, two American and one Dutch, spent US$30
million drilling wells in the Tano basin. On 21 June 1992, an offshore Tano basin well produced about 6,900
barrels (1,100 m3) of crude oil daily.[78]
In the early 1990s, GNPC reviewed all earlier crude oil and natural gas discoveries to determine whether a
predominantly local operation might make exploitation more commercially viable. GNPC wanted to set up a
floating system for production, storage, off-loading, processing, and gas-turbine electricity generation,
hoping to produce 22 billion cubic feet (620,000,000 m3) per day, from which 135 megawatts of power could
be generated and fed into the national and regional grid. GNPC also won a contract in 1992 with Angola's
state oil company, Sonangol Group, that provides for drilling and, ultimately, production at two of
Sonangol's offshore oilfields. GNPC was paid with a share of the crude oil.[78]
The country's Tema Oil Refinery underwent the first phase of a major rehabilitation in 1989. The second
phase began in April 1990 at an estimated cost of US$36 million. Once rehabilitation was completed,
distribution of liquified petroleum gas was to be improved, and the quantity supplied was to rise from 28,000
to 34,000 barrels per day. Construction on the new Tema-Akosombo oil products pipeline, designed to
improve the distribution system further, began in January 1992. The pipeline was to carry refined products
from Tema to Akosombo Port, where they will be transported across Lake Volta to northern regions.
Distribution continued to be uneven, however. Other measures to improve the situation included a US$28
million project to set up a national network of storage depots in all regions.[78]
The Tema Lube Oil Company commissioned its new oil blending plant, designed to produce 25,000 tons of
oil per year, in 1992. The plant was to satisfy all of Ghana's requirements for motor and gear lubricants and
60 percent of the country's need for industrial lubricants, or, in all, 90 percent of Ghana's demand for
lubricant products. Shareholders included Mobil, Shell, and British Petroleum (together accounting for 48
percent of equity), Ghana National Petroleum Corporation, and the Social Security and National Insurance
Trust (SSNIT).[78]
An oilfield which is reported to contain up to 3 billion barrels (480,000,000 m3) of light oil was discovered in
2007.[79] Oil and Gas exploration is ongoing, and the amount of both oil and gas continues to increase. [80]
There is expected to be a tremendous inflow of capital into the economy beginning from the first quarter of
2011 when the country starts producing oil in commercial quantities. The oil is expected to account for 6%
of the revenue for 2011.[81]
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2. Ghana is believed to have up to 5 billion barrels (790,000,000 m3) of oil in reserves,[82] which is the 6th
largest in Africa and the 25th largest proven reserves in the world. (from Wikipedia)
The current problem presents us with a good opportunity to critically look at our energy delivery system and
to take bold and innovative steps to further develop and expand the market, the service delivery capacity of
the industry and the complexity of the regulatory regime that oversees the market. It is interesting to note
that, in the ongoing discussion on the LPG shortages, nobody is blaming part of the problem on the fact that
the country has very limited production and storage facilities for LPG. In the whole country, only the Tema
Oil Refinery (TOR) has an LPG storage facility whose capacity is only about 6,400MT while the national
demand is estimated to be at least 700MT per day (about 5,000MT per week). Furthermore, the maximum
rate of LPG production at TOR is about 350MT per day (96MT/day for the CDU and 250 MT/day for the
RFCC) and the capacity to evacuate the product onto the market is also limited to only 900MT per
day! Even a cursory look at these numbers shows that the production capacity, the storage infrastructure
and the product delivery capability are all woefully inadequate. These shortfalls constitute a major
bottleneck in the LPG service delivery system and indeed a barrier that must be overcome if the shortages
are to be permanently resolved. This is the fact of the matter!! Under such a scenario, shortages are bound
to occur whether vehicles use the product or not.
From the above discussion, it then follows that the ideal solution to the problem of LPG shortages must
necessarily be both holistic, in coverage, and sustainable, in application.
The solution must seek to simultaneously address all the issues raised and must encompass all the positive
attributes of the two previous positions while at the same time cure the ills therein. In other words, the
solution must be efficient (in the pareto sense) and progressive in that it must be forward looking and
envisages an expanded LPG market that now caters for two sectors of the economy:
a) The Residential/Household sub-sector, and
b) The Transport sub-sector.
This way, the good intensions of government for the residential/household sector can be preserved while at
the same time, the use of LPG in vehicles is formalized in the transport segment of the market, recognizing
the fact that LPG use in vehicles is cleaner than both petrol and diesel and thus desirable for environmental
reasons. The regulations governing the transport segment of the LPG market could then be made such that
the appropriate road and other levies are paid and the current subsidies removed so that there is equity in the
system.
In conclusion, I am advocating for a new policy directive on LPG consumption in Ghana. This new policy
should conserve the status quo for the residential/household sector but now recognize LPG use in the
transport sector as desirable. The policy must therefore take steps to formalize the growth and development
of that market segment through appropriate regulation and controls without compromising the collection of
taxes and levies that are placed on all fuels meant for road transportation.
To achieve this, a number of things have to be done:
1. A study (market research) must be conducted under the auspices of the NPA to determine the actual size
of the LPG market and its utilization profile within the market.
2. The deregulation process must be further deepened to allow market forces to work in matching demand
with supplies.
3. The petroleum products price build-up must be expanded to have the entry for LPG split into two –
Household LPG, LPG(H) and Vehicular LPG, LPG(V). LPG(H) must continue to enjoy the current
subsidies and all the tax exemptions as the situation is, currently. However, LPG(V) must be treated like
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3. petrol and diesel in that they must not enjoy any subsidy but rather the appropriate road fund, energy fund
and exploration fund levies must be duly imposed.
4. Vehicles that run on LPG must registered as such so that a reliable database can be kept on the growing
size of that segment. Only vehicles that comply with the technical specification of the Energy Commission
must be allowed to use LPG to ensure safety of operation. Compliance with both technical and statutory
requirements of vehicles run on LPG will be monitored and enforced at the time of licence renewal and of
roadworthy certification.
5. For a start, the NPA must identify and license only a few LPG Distribution Companies and Oil Marketing
Companies (OMCs) that can participate in this new LPG market segment, in dispensing LPG to vehicles on
pilot basis.
6. Both TOR and BOST must be assisted to build additional LPG storage facilities as the current installed
capacity at TOR is woefully inadequate. Alternatively, appropriate incentives and encouragement must be
given to the private sector to, as quickly as possible, establish more storage facilities for holding stocks of
LPG badly needed by the market.
By Dr. Kwame Ampofo
Shortage LPG s in Ghana: What you need to know.
Submitted by Awudu on Sat. 02/07/2011 - 10:09
Background of the Recent Shortage of LPG
(10th - 16th June): A vessel with LPG consignment could not berth at Tema to discharge LPG for Ghana
because when it arrived, the Tema oil jetty was occupied by another vessel discharging products. This vessel
with the LPG was expected earlier but could not arrive on schedule because it had encountered a delay at the
loading port in Equatorial Guinea. The vessel waited for its turn and discharged LPG for Ghana and returned.
Upon arrival in Equatorial Guinea, it could not reload as planned because it missed its schedule. These
delays created some shortages in supply, but by June 16th, a vessel arrived to deliver 6,500mt and by 20th
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4. June, it completed discharging all of it. This disruption of two-supply delays has far reaching consequences
on the rather tight arrangement we have with LPG.
Our Stock Position Now:
The Tema Oil Refinery (TOR), on Monday (20-6-2011) supplied almost 1000KG of LPG to the market.
What it has left in store as at Wednesday Morning (0900HRS) was 5,100KG. We are expecting additional
consignment of 4,000MT next week (29-6-2011). Presently, TOR is continuing with its weekly production of
1000MT whilst imports are expected to augment the local output. These outputs are against the background
that we are consuming about 4-5000MT every week, in the meantime our entire storage capacity is about
6,500MT. This situation leaves us with a buffer of between 1,500-2000MT only which can sustain us for
only three (3) days. These result in shortages whenever a vessel misses its berthing schedule.
What are the constraints?
The National Petroleum Authority would like to draw the attention of the consuming public to the following
constraints faced with the delivery of LPG in Ghana. These constraints are mainly in the supply chain and
are as follows:
1. Berth Constraint
Ghana’s only oil jetty located in Tema is ‘a single multi-user’ by this mean, same oil jetty serves all Ghana’s
petro-chemical needs. For instance, the jetty is used by TOR for import of LPG and export of Naphtha and
Residual Cracked Fuel Oil, Tema Lube Oil also uses the same jetty for import of Base Oil and all Bulk
Distribution Companies (BDCs) use it for the import of all other petroleum products which are also needed
most. These factors result in a tight schedule with very little or no-room for slips in laycan-(exact dates of
arrival for vessels).
2. Pumping Constraint:
The single pipeline from the Jetty to TOR is approximately 5km in distance and 6inch in diameter. This small
diameter pipeline only allows a flow-rate of 60 to 70MT an hour which takes between 4 to 5 days to deliver
an average cargo of 5000mt of LPG. In other words about 30 to 40 trucks a day (median truck size is 20mt)
and takes between 9 to 10 hours to complete.
3. Storage:
TOR can store almost 7,000MT and this is the whole capacity of the entire country.
4. Delivery Constraints:
Under normal circumstance, TOR can discharge about 1000MT of LPG to the market per day and regular
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5. daily demand is 700MT. However, in times like this, they can stretch it to about 900mt by working extra
hours including weekends to meet the high demand. It must be noted, this must be done with all the safety
concerns in mind.
The peculiar nature of Ghana’s LPG supply cycle as enumerated above is such that a disruption of two (2)
days to the cycles causes shortages of 1 to 2 weeks flow of supplies as consumers resort to panic buying.
This is the reason why even though products are being supplied to the market now, pockets of shortages still
exist in some parts of the country. We have noticed that the long queues have been abating as the backlog of
supply has been cleared and we have returned to normalcy soon.
The Way Forward
TOR to submit cost proposal, with defined timelines, to expand the pipelines, add boosters and other
modifications to ensure quicker discharge by tankers to TOR storage.
BOST to advice on how to accelerate the project to have a Barge System at both Tema and/or Takoradi Ports
which will directly dispense LPG to the Oil Marketing Companies (OMCs) Bulk Road Vehicles (BRVs, or
Tankers). This strategy will be independent of the current jetty and free from delays arising from queues.
NPA to conduct an in-depth nationwide study on the demand (domestic and vehicles) and supply of LPG in
the country and to advice the Ministry on Medium to long term solutions to the perennial shortages of LPG
all over the country.
NPA is also liaising with the Association of Oil Marketing Companies (AOMCs) to ensure that LPG
companies extend equal supplies of LPG to the three northern regions and Brong Ahafo noted to have acute
shortages of the commodity.
The NPA is also working with TOR to ensure that vessels with LPG berth weekly to deliver product to
augment the shortfall from TOR’s production. The immediate strategy is to increase the local stock levels for
LPG to clear all backlogs of supplies created as a result of the two-delay in product delivery.
Issued By:
The PR & Consumer Service Department
National Petroleum Authority
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