The U.S. Ambassador to Ghana, Virginia Palmer, has urged government to enhance its investment climate by reaffirming the sanctity of contracts.

Ambassador Palmer, speaking at the Ghana Oil and Gas Conference 2024 in Accra, said despite the country’s efforts to provide a clearer regulatory framework with the 2016 petroleum law, ongoing tax disputes have raised alarm bells among investors.

“While the law provides a clearer regulatory framework for the upstream sector, ongoing tax disputes are indicative of an unpredictable application of fiscal assessment,” Ambassador Palmer stated.

The remarks come amid growing concerns from international investors regarding predictability and fairness of the regulatory environment, particularly in the oil and gas sector, with instances of contract interferences leading to judgement debts against the country.

The diplomat underscored that a stable investment climate plays a critical role in attracting private capital to the country’s burgeoning crude oil production.

“It’s a lot of work for everyone, but it’s important. And for Ghana to fund its own development, it must act decisively to promote greater investment in clean energy and its oil and gas,” she stated.

She however commended Ghana’s participation in the Extractive Industries Transparency Initiative (EITI) – but called for a more robust implementation of its standards.

“Ensuring transparency, strengthening governance and accountability in the energy sector are key to improving the business investment environment and making progress on Ghana’s energy goals,” she said.

Commenting on the exodus of major international oil companies (IOCs) from mature African basins, she said: “A significant challenge amid this exodus is ensuring a business climate that is welcoming to investors,” adding that “the new Ghana’s business climate will be an important next step, and is one it must tackle.”

She stressed the importance of contract sanctity. “This means a commitment to contract sanctity, including provisions on international arbitration. It means clear, consistent and fair treatment by the Ghana Revenue Authority,” she asserted.

“It means speedy dispute resolution, real consultation on changes to localisation requirements and timely payments. These elements all strengthen predictability.”

The Ambassador acknowledged the country’s well-deserved reputation for stability and rule of law, but insisted that improvements are still necessary.

Chief Executive Officer (CEO)-Ghana Upstream Petroleum Chamber, Mr. David Ampofo, in his welcome remarks noted that this year’s conference is focused on examining the upstream industry’s performance in Ghana and sharing ideas on how to further reinvigorate it, saying “Ghana is our focus”.

The two-day event, organised by Ghana Upstream Petroleum Chamber, comprises presentations geared at highlighting key issues to be addressed “as we seek to encourage the emergence of a reinvigorated industry”.

He said the annual report produced by the Chamber results from extensive research and engagement with members and other stakeholders.

“It provides a comprehensive overview of the upstream industry and its contributions to the economy and it includes recommendations for addressing the challenges and capitalising on the opportunities.”

“This year we are prioritising the discussion on natural gas, as it takes centre-stage on both the global and domestic fronts,” he said.

Among other things, he stressed that there is a “need to turbo charge exploration by expediting the award of new exploration licences and encouraging infrastructure-led exploration to create a pipeline of development projects.

“The one issue that we believe can make all the difference is further collaboration between government agencies and international oil companies, in order to promote the ease of doing business and restore our place as an attractive investment destination when it comes to upstream petroleum.”

This year’s conference was organised under the theme ‘Stimulating the growth of Ghana’s oil and gas industry’.

Also speaking at the Conference’s opening session, CEO-Petroleum Commission Mr. Egbert Faibille noted that the conference’s theme is appropriate – considering that the country’s upstream oil and gas industry has positioned itself for the much-needed investments to spur accelerated exploration, production (EP) activities and growth.

He said: “The Petroleum Commission is desirous that the reputation of Ghana as an investment destination where we protect investments is maintained and enhanced.”

He argued that money does not go or stay in a place where it will not get protection, stressing that since the country’s commercial oil and gas production started in 2010 “all our investor friends have not had cause to complain about any action aimed at disturbing their investment”.