Some stakeholders in the oil and gas industry have urged the government to urgently resolve the impasse between the local subsidiary of Italian oil company, Eni Ghana, and indigenous private exploration and production company, Springfield E&P, in the national interest.

More than a year after the government directed the two companies to link (unitize) their neighbouring discoveries, that has not been done due to a disagreement.

Springfield’s Afina field was discovered in the West Cape Three Points (WCTP2) while Eni’s Sankofa field, was discovered in the Offshore Cape Three Points (OCTP).

The stakeholders that made the call are the Institute for Energy Security (IES), the Ghana Oil and Gas Service Providers Association (GOGSPA), the Executive Secretary of Africa Centre for Energy Policy (ACEP), Mr Ben Boakye; and an energy consultant, Dr Ishmael Ackah.

Approach

The stakeholders said the government should encourage the companies to use arm’s length dialogue and common-sense approach to resolve the differences between the companies to produce oil from the straddling fields.

The Minister of Energy, Dr Matthew Opoku Prempeh, however, told the Daily Graphic that until recently when the parties resorted to the court to resolve certain issues, the government was engaging the parties to speed up the process towards unitization.

That notwithstanding, the minister stressed that the ministry was committed to ensuring that the issues were resolved expeditiously to enable the unitization of the fields for optimum recovery of petroleum from the fields for all parties.

Background

In April 2020, the then Minister of Energy, Mr John Peter Amewu, in accordance with Section 34(1) of the Petroleum (Exploration and Production) Act, 2016 (Act 919), directed ENI and Springfield to execute unitization with respect to the Sankofa field in the OCTP and Afina discovery in the WCTP contract areas.

Prior to the directive, the minister had been satisfied by a geophysical and geological analysis in March 2018, which showed that the Sankofa Cenomanian Reservoir extended into the WCTP Block 2 contract area.

Calls

In its periodic releases on the industry known as MarketScan, IES said the unnecessary delay in producing the fields was not in the best interest of the country, hence the need for the government to take the necessary steps to ensure early resolution of the deadlock.

“The institute finds the delay in following the directive shocking and disappointing, given that the directive was issued in accordance with law and in the best interest of all the parties, including the state,” it said.

The institute said its analysis established that the unitization would lead to maximum economic benefits to the state and all the parties involved in the production of the unitized accumulation.

Common practice

In his submission, Mr Boakye said unitization was one of the most common things in the oil industry, hence the need for the government to allow the two companies to use common-sense approach to resolve the issues.

He said if the government wished to intervene in the disagreement, it should be for the selection of an independent entity to carry out the assessment of the fields to confirm that they were straddling.

For his part, Dr Ackah also underscored the need for the two parties to use dialogue as “unitization is not uncommon, even between countries,” adding that most of the cases were resolved through dialogue.

That, he said, was a better approach that would also affect positively Ghana’s brand as an investment destination.

The Executive Secretary of GOGSPA, Mr Nuetey Adzeman, said further delay in resolving the impasse would affect the growth of the industry.

“We have confidence in the ability of the sector minister and his team to handle the issues,” he stated.

Legal redress

In a statement on the same issue, the Ministry of Energy said the sector minister was working hard to ensure that there was optimum recovery of petroleum through activities that conformed to international best practice.