In the heart of West Africa, Ghana stands on the precipice of a potential energy revolution, one that could reshape its economic landscape and bolster its energy security. A recent study, led by Richard Amorin of the University of Mines and Technology in Tarkwa, Ghana, has shed new light on the benefits of refining crude oil locally, offering a compelling case for Ghana to prioritize this industrial endeavor.
Ghana’s oil story began in 2007 with the discovery of the Jubilee field, and since then, the petroleum sector has been a significant driver of economic growth. However, the country has been heavily reliant on imports to meet its domestic fuel demand. In 2022 alone, Ghana imported nearly four million metric tonnes of petroleum products, with diesel being the most significant component.
Amorin’s study, published in the ‘International Journal of Emerging Research in Engineering, Science, and Management’—which translates to ‘International Journal of Emerging Research in Engineering, Science, and Management’—delves into the economic feasibility of refining Ghana’s crude oil, with a particular focus on the Jubilee field crude. The research employs a cost-benefit analysis, utilizing Aspen HYSYS and Excel Spreadsheet for modeling and calculations.
The findings are promising. The analysis indicates a positive Net Present Value (NPV), a payback period of 3.5 years, and a Return on Investment (ROI) of 29%. “These figures suggest that investing in local refining is not just economically viable but also strategically advantageous for Ghana,” Amorin asserts.
The study also estimates significant cost savings. By refining petroleum locally in 2022, Ghana could have saved approximately $1.4 billion (GH₵16.3 billion). Moreover, local refining could yield a net gain of $8.66 (GHS 96.99) per barrel. These savings and gains could be reinvested into other sectors, stimulating further economic growth.
Looking ahead, the study forecasts increasing fuel consumption volumes, rising import costs, and escalating ex-pump prices from 2013 to 2033. These projections underscore the urgent need for enhanced local refining capacity. “Local refining is not just about economic gains; it’s about energy security and self-sufficiency,” Amorin emphasizes.
The implications of this research extend beyond Ghana’s borders. It offers a blueprint for other African countries with untapped petroleum resources, demonstrating the potential benefits of local refining. As Amorin puts it, “This is not just about Ghana; it’s about a model for sustainable energy development in Africa.”
The study’s findings could catalyze a shift in Ghana’s energy sector, encouraging investment in local refining infrastructure. This, in turn, could create jobs, generate foreign exchange savings, and enhance energy security. As Ghana and other African nations grapple with the challenges of energy security and economic diversification, Amorin’s research provides a timely and compelling case for local refining.
In the words of Amorin, “The future of Africa’s energy sector lies in harnessing our resources sustainably and strategically. Local refining is a significant step in that direction.” As Ghana and other African nations navigate their energy futures, this research could illuminate the path forward, shaping policies and investments in the years to come.