Springfield E&P (SEP) and ENI Ghana Exploration Limited ( ENI) have been directed by government to commence immediate talks on unitization of the Afina and Sankofa fields offshore Ghana (operated by SEP and ENI respectively).
Based on technical evidence that the reservoir straddles both blocks, government directed in a letter dated 9th April, to commence unitization talks immediately and complete it in 120 days and provide the ministry with the finalised Agreement.
The Minister of Energy, Mr. John Peter Amewu, explained this will enable him to review and approve the unitization within 120 days from the date of the letter as required by law.
The minister stated: “Per the post-drill data and analysis, the Afina-1x Cenomanian reservoir has identical reservoir and fluid properties as the Sankofa Cenomanian reservoir, thus providing further evidence that the two reservoirs are one and the same”.
According to Mr. Amewu, this will ensure efficient production of the reservoir; maximise economic recovery of petroleum from the two Contract Areas; avoid unnecessary competitive drilling which might destroy the reservoir, and therefore is in the national interest.
He cautioned that he is empowered to stipulate the terms and conditions of unitization if the two parties fail to comply with this order per Regulation 50(6) of L.I. 2359.
SEP and ENI are expected to begin the discussions immediately.
This latest development underscores government’s focus on continued development of the oil and gas sector even in a challenging crude-price environment.
If successfully negotiated, the unitization will usher in a new era of the country’s upstream sector with the first unitization agreement between an International Operator and an indigenous Ghanaian Operator.
It will also leapfrog SEP as a Ghanaian company from exploration phase to a production phase without any development risk, thereby demonstrating the growing confidence of an indigenous African Operator.
SEP drilled the Afina-1 well in October 2019, making two gas and light sweet oil discoveries at a water depth of 1,030 metres. With this, the company more than doubled its proven oil reserves to 1.5 billion barrels and added 0.7tcf of gas to the existing discoveries.
The Afina discovery, which is joined to Sankofa, is a part of the WCTP 2 Block where SEP is Majority Interest Holder (84%), with the Ghana National Petroleum Corporation and its exploration company, EXPLORCO, holding the remaining interest.
Sankofa is a part of the OCTP Block, where Eni is Operator with 44.44 %, Vitol 35.56 % , GNPC 20% and has been producing since 2017.
The OCTP is reported to have reserves of about 40 billion cubic metres of unassociated gas and 500 million barrels of oil.