Government proposes three-tier royalty system for petroleum operations based on water depth
Energy and Green Transition Minister John Abdulai Jinapor announced the proposed arrangement during his keynote address at the 2026 Local Content Conference and Exhibition, as part of a package of reforms aimed at attracting new investment into Ghana’s petroleum industry. The other proposals include reducing GNPC’s initial carried interest from 15% to 10%, replacing signature bonuses with commerciality bonuses and introducing an R-factor-based Additional Petroleum Tax in place of the Additional Oil Entitlement.
The government is proposing a new royalty framework for petroleum operations, with payments to be determined under a three-tier sliding scale linked to the water depth of oil and gas projects.
Energy and Green Transition Minister John Abdulai Jinapor announced the proposed arrangement during his keynote address at the 2026 Local Content Conference and Exhibition, as part of a package of reforms aimed at attracting new investment into Ghana’s petroleum industry.
Under the proposed system, the existing approach to royalty payments would be replaced with a three-tier structure that takes account of water depth. The measure is among seven legislative and fiscal changes the government is considering to improve the country's petroleum investment framework.
The other proposals include reducing GNPC’s initial carried interest from 15% to 10%, replacing signature bonuses with commerciality bonuses and introducing an R-factor-based Additional Petroleum Tax in place of the Additional Oil Entitlement.
The government is also considering extending petroleum agreement durations from 25 to 30 years and increasing the tax-loss carry-forward period from five to ten years.
Mr Jinapor said the broader reform agenda is intended to attract investment and position the petroleum industry to contribute more meaningfully to national economic transformation.
- petroleum
- government
- royalty
- water
- depth
- system
- tier
- investment
