Ghana is seeking to reverse a prolonged decline in oil production as Shell and Chevron move closer to securing potential rights to the South Deepwater Tano Cape Three Points offshore block, in a development that could bring fresh investment and expertise to the country’s upstream sector.

Shell and Chevron have signed a preliminary, non-binding memorandum of understanding with Ghana’s state-owned Ghana National Petroleum Corporation (GNPC) to begin negotiations over rights related to the offshore block. The agreement does not yet constitute a final award or production licence, with further negotiations and regulatory approvals still required.

The move comes as Ghana faces declining output from its mature oil fields. The country recorded a fifth consecutive annual decline in production in 2025, with average output from its major fields falling to about 102,200 barrels per day, according to the GNPC.

Ghana’s Petroleum Commission has said oil production has fallen by roughly half from its 2019 levels, reflecting the maturity of existing fields and the need for new investment to sustain and increase output.

The South Deepwater Tano block is therefore seen as an opportunity to attract new capital and technical expertise into Ghana’s offshore industry. Shell and Chevron, two of the world’s largest energy companies, could bring significant exploration, development and operational capabilities if negotiations result in a final agreement.

Accra has been working to make the petroleum sector more attractive to international investors while extending the life of existing assets. In 2026, Ghana extended the licences for the Jubilee and TEN fields to 2040, a move expected to support additional investment and production activity.

The government’s strategy reflects the growing pressure on Ghana’s oil industry. Mature fields have experienced declining output, while developing new offshore resources requires substantial capital, advanced technology and long-term commitments.

For Ghana, securing new investment is particularly important because oil revenues remain a source of government income and foreign exchange. A sustained decline in production could reduce those revenues and increase pressure on the country’s broader fiscal position.

However, the potential involvement of Shell and Chevron remains at an early stage. The latest memorandum only establishes a framework for negotiations, and neither a final investment decision nor a confirmed production timetable has been announced.

The talks nevertheless signal renewed interest in Ghana’s offshore oil potential at a time when Accra is seeking to revive a sector that has been central to the country’s economy for more than a decade.

The outcome of the negotiations will depend on the terms agreed between the government, GNPC and the oil majors, including investment commitments, production rights and the regulatory approvals required to move the project forward.