It has been almost two years since former Minister of Energy, Peter Amewu, directed Eni Petroleum Ghana Limited and Springfield Exploration and Production Limited (SEP) to exchange data on their respective fields and work toward unitisation of the Sankofa and Afina fields operated by the two oil companies.
To date, no progress has been made to advance the directive’s purpose: to ensure that in seeking their interests those of the nation are not disregarded.
Instead, the two parties have since been in a fierce legal battle – with Eni questioning the propriety and legitimacy of the directive, citing the need for further conditions to be established for unitisation. Springfield, on the other hand, has pointed to having fulfilled conditions necessary for the process of unitisation to be activated – and pushed for the courts to interpret the laws as they stand.
For us at B&FT, this is one area government and our legislature should apply their minds to. Oil and gas production in this country should not be treated the same way as we have all the other natural resources. We have an opportunity to set the right precedents and ensure that the enacted laws are fully applied.
The legal battle between ENI and Springfield may be corporate, but the consequences are far-reaching and critical to the country’s economic health. An active unitised field not only guarantees a steady stream of revenue to the nation, but also ensures sturdy development of the oil and gas supply chain sector.
In June 2021, a Commercial High Court sitting in Accra directed ENI and Vitol to pay 30 percent of the revenues from operations on the Sankofa Field into an interest-bearing escrow account until final determination of the substantive case.
Again, on January 24th 2022, Justice Mariama Sammo reiterated her earlier directive in clear terms for Eni and Vitol to carry out the court’s orders of June 25th 2021 – following an application brought by SEP for the court’s clear interpretation of its ruling after ENI and Vitol failed to comply.
However, checks from the Courts indicate that the two companies have not carried out the directive and/or refused to carry out the orders. Is it the case that some institutions, particularly when they are foreign, can operate above the law and reprobate and approbate the law as they desire?
The Courts of Ghana should not only be seen to be delivering justice but must also be respected like their counterparts in other jurisdictions. After all, businesses can only thrive in environments where laws work.
Springfield and Eni’s legal tussle should not be ignored by the state, nor should the laws of our land be disrespected by any entity – whether Ghanaian or foreign. We appeal to the parties to settle this matter quickly .
Low manufacturing base could affect ability to benefit fully from AfCFTA
According to a new report from the World Bank, Ghana may not be among the largest gainers of the African Continental Free Trade Area (AfCFTA) due to its rather small manufacturing base and underdeveloped transportation infrastructure, particularly its railway network.
The report, titled ‘Africa in the New Trade Environment’, believes countries such as South Africa, Nigeria, Kenya, Senegal and Angola with robust manufacturing sectors and developed transportation infrastructure will rake in more benefits than other nations.
Ghana’s industrial sector, according to data from the Ghana Statistical Service, has seen its growth contract consecutively in five quarters after the nation was hit by the pandemic in 2020 – making it susceptible to trade imbalances.
Admittedly, the country has among the poorest railway infrastructure on the continent, which is another debilitating factor for enhanced trade.
To reduce losses on the AfCFTA market, the World Bank is urging countries such as Ghana, projected to be less gainers, to deepen integration with the top gainers; as these can facilitate the movement of people and goods.
The World Bank report adds that countries and regional entities need to implement policies which ease the constraints that inhibit the poor and poorer economies from accessing market infrastructure; and facilitate better integration of leading and lagging regions and movement of people across space and skill levels.
“Deepening integration would better address the divergence than individually targetted compensatory mechanisms, which would help only in coping with transitions during the short-term,” the report states.
Another area of concern is the brewing tensions between local trade unions and the overall ambition of AfCFTA – and the Ghana Union of Traders’ Association stance is a prime example of such tensions that tend to defeat the overall ambition of a free trade area.
In this regard, the World Bank is urging member-countries to make the regional strategy part of their national policy and address the tensions that arise between the two. This, we believe, is very crucial if the benefits of AfCFTA are to be realised.
To address these concerns, governments should find the sweet-spot that reinforces national economic goals and ensures maximum gains from increased integration.
Reaching this difficult balance will require countries to look beyond a static assessment of their priorities and policies, it advises.
