By Marcella Mwinkoma Babing
Ghana is taking another step towards refining more of its own crude oil at home, with Tullow Oil confirming that it has started supplying crude from its Ghanaian fields to local refineries.
The first cargo was purchased earlier this year by Sentuo Oil Refinery, with the crude coming from Tullow’s Jubilee and Tweneboa, Enyenra and Ntomme (TEN) fields.
Tullow’s Chief Financial Officer, Richard Miller, described the development as a significant achievement for Ghana’s oil sector.
“This is a fantastic achievement looking at what has happened in Ghana’s oil sector over the years,” he said.
But the development also raises a question that many Ghanaians may be asking:
If Ghana has been producing crude oil for years, why has the country still had to import crude for its refineries?
The answer lies partly in how Ghana’s crude has traditionally been marketed and in the challenges facing the country’s refining infrastructure.
Tullow’s crude entitlement has historically been marketed through its commercial relationship with global commodities company, Glencore Energy UK Limited which serves as the exclusive marketer of Tullow’s crude entitlement.
That meant getting Ghanaian crude into a local refinery required a commercially viable arrangement between the relevant parties.
Tullow says the latest transactions were conducted on commercial terms, with financing arrangements also put in place to support the initiative.
Mr Miller said Sentuo has now become one of the significant buyers of crude produced from Ghana’s oil fields.
“Sentuo Oil has become one of the prolific buyers of crude not only from Tullow Oil alone but also from other partners on Ghana’s oil fields,” he said.
WHY DID GHANA HAVE TO LOOK OUTSIDE?
For years, Ghana’s refining capacity was constrained by problems at the Tema Oil Refinery, which was largely out of operation for an extended period.
That left the country heavily dependent on imported petroleum products and, where refineries were operating, crude supplies from outside Ghana.
At the launch of Sentuo’s first Jubilee crude shipment in June, Energy and Green Transition Minister, Dr John Abdulai Jinapor acknowledged the problem, describing the previous model as unsustainable.
“We are waiting for round two to four, and all the rounds forever. It shouldn’t be a one-day activity,” Dr Jinapor said, urging continued supplies of Ghanaian crude to local refineries.
That statement captures perhaps the biggest issue facing this new development:
One cargo is not enough. Consistency is the real test.
SO, WHAT HAS CHANGED?
One of the biggest changes is the gradual restoration of Ghana’s domestic refining capacity.
In June, Sentuo Oil Refinery received its first one-million-barrel shipment of Jubilee crude for domestic processing.
And in August, President John Dramani Mahama commissioned the refurbished Crude Distillation Unit of the Tema Oil Refinery, marking the processing of another one million barrels of locally produced Jubilee crude.
President Mahama said the move was more than simply getting TOR back into operation.
“Nations become prosperous by adding value to what they produce, by developing local industries and by creating opportunities for their own people,” he said.
The President also disclosed that TOR had received three separate one-million-barrel crude cargoes since May, including Ghanaian Jubilee crude, and stressed that the refinery had fully paid for the Ghanaian crude.
“TOR fully paid for the Ghanaian crude. It was not given to TOR on credits,” President Mahama said.
That is significant because it demonstrates that local refining does not necessarily have to depend on government giving crude away or subsidising the transaction.
CAN THIS BECOME A CONSISTENT SUPPLY CHAIN?
There are several indicators suggesting that this could become more than a one-off arrangement.
First is Tullow’s production outlook.
The company expects to lift 14 cargoes in 2026 11 from Jubilee and three from TEN. It lifted six cargoes during the first half of the year and expects eight more in the second half.
Second is the continued investment in production.
Tullow expects six Jubilee wells to come on stream in 2026, while the company has also secured a new drilling campaign for future years. Its petroleum agreements covering the Jubilee and TEN fields have been extended to December 2040, providing a longer-term framework for continued production and investment.
Third is the expansion of local refining capacity.
Government estimates that the planned expansion of TOR and Sentuo could eventually enable the two refineries to meet about 70 percent of Ghana’s domestic demand for refined petroleum products.
Dr Jinapor says the objective is to reduce dependence on imported petroleum products, improve fuel supply reliability and reduce pressure on the country’s foreign exchange requirements.
And Tullow itself sees the local refining arrangement as part of a broader value chain.
The company’s Managing Director, Jean-Medard Madama, said:
“Facilitating access to locally produced crude for domestic refining helps strengthen the links across the petroleum value chain while contributing to energy security, industrial growth and long-term value creation for the country.”
The significance of this development goes beyond where Ghana gets its crude.
For years, the country has been caught in a frustrating cycle producing crude oil, exporting it, and then importing petroleum products needed by consumers and businesses.
Trade, Agribusiness and Industry Minister, Elizabeth Ofosu-Adjare captured that history bluntly during the first Jubilee crude delivery to Sentuo.
“For more than 15 years, we watched our crude leave our shores and return as finished products at prices we could not control. Today, that cycle begins to change.” She said.
If the arrangement between producers and local refineries can be sustained, Ghana could retain more value from its petroleum resources, reduce exposure to international supply disruptions and potentially reduce some of the foreign exchange pressure associated with importing crude and refined products.
But there is still a critical question.
Can Ghana turn these first successful deliveries into a dependable, long-term system where locally produced crude consistently feeds local refineries or will the country once again find itself exporting its crude while importing the fuel it needs?
That is the real test of Ghana’s new push for domestic refining.
