By Kizito CUDJOE
Government has withdrawn its directive mandating the unitisation of Springfield Exploration and Production Limited’s (Springfield) Afina-1X discovery and Eni Ghana Exploration and Production Limited’s (Eni) Sankofa Cenomanian Oil Field, citing procedural flaws identified by an arbitration tribunal.
In a letter addressed to the managing director of Eni Ghana and Springfield as well as the country manager of Vitol Upstream Ghana Limited, the Ministry of Energy and Green Transition said this decision follows a review of an Arbitral Award issued on July 8, 2024 (SCC Arbitration 2021/114, Eni & Vitol v. Ghana & GNPC) and legal advice from the Attorney General.
The tribunal acknowledged potential benefits of unitisation but flagged procedural deficiencies, including lack of a statutory trigger for unitisation under Ghana’s Petroleum (Exploration and Production) Act, 2016 (Act 919) and related regulations (L.I. 2359).
It also criticised the arbitrary allocation of participation interests, stating that the determination was unsupported by sufficient evidence.
Government Stance & Future Possibilities
“The ministry acknowledges the Tribunal’s findings – that while the issuance of the directives breached the Petroleum Agreement due to specific implementation flaws, the concept of unitisation itself was not deemed inherently unlawful,” the letter said.
It added that, in accordance with the discretionary powers granted to the Minister under Section 34 of Act 919, the directive is being formally withdrawn.
However, the ministry emphasised that this decision is without prejudice to the minister’s authority to issue a new directive should future evidence support such a move.
Government reiterated its commitment to ensuring a stable investment environment in the upstream petroleum sector while maintaining compliance with Ghana’s legal and regulatory framework.
The now-revoked unitisation directive was first issued in 2020, aiming to merge Springfield’s Afina-1X discovery with Eni’s adjacent Sankofa field for joint development. Eni and its partner Vitol opposed the move, arguing that there was insufficient evidence to justify unitisation.
It remains unclear whether the decision will lead to further negotiations or a revised unitisation proposal in the future.
