Fitch Solutions Downstream Oil & Gas Risk/Reward Index has ranked Ghana 5th out of 19 Sub Saharan African countries on the weak downstream oil sector ranking.

The country was also ranked 57th globally out of 92 nations as its Petroleum Hub Development project has been described as overambitious in the Oil and gas industry.

The index says “Although Ghana scores slightly higher than the regional average, it’s limited refining capacity and low utilization rates, combined with its under-developed regulatory framework, mark it as an unattractive area for private investments resulting to low production.”

It further stated that “if the necessary funding for the Petroleum Hub Development can be obtained, the project offers significant upside to Ghana’s RRI [Risk Reward Index] position and the future of its downstream sector”.

However, the parliament of Ghana passed the Petroleum Hub Development Corporation Bill in October 2020, which will establish the Petroleum Hub Development Corporation and subsequently fuel the growth of the country’s downstream sector.

It is expected to incorporate four refineries, crude oil storage tanks and two petrochemical plants.

The integrated petroleum hub will be built in Bonyere in Western Region and will be constructed in three phases. It is expected to be completed by 2030.

But Fitch Solutions considers the project as a high risk given the existing dynamics across the nation’s downstream sector, citing Tema Oil Refinery as an example. A weakness is its limited projected growth in demand for its refined fuels.

Nonetheless, the Energy Ministry expects the three-phase project to attract total investments of about $60 billion with $12 billion needed to fund the first phase.