No sign of oil in Afina discovery - ENI SpA claims

Italian energy giant Eni and its partner Vitol have said there is no evidence that the Afina discovery, which is the subject of a unitisation dispute with Ghanaian oil firm Springfield, is capable of producing hydrocarbons.

The two oil companies’ claim was contained in a notice of arbitration filed against the Republic of Ghana and the Ghana National Petroleum Corporation (GNPC) over a unitisation directive issued by the Energy Ministry last year.

In the notice, dated August 16, Eni and Vitol stated that the Sankofa field, which is part of the Offshore Cape Three Points (OCTP) project, is a US$10.6bn project in which the companies have already invested US$6.05bn and which is producing hydrocarbons in large volumes for the benefit of Ghana.

In contrast, they said the Afina discovery currently amounts to a single exploration well which has not been appraised and is far less developed.

“There is not even any evidence that the Afina discovery is capable of producing hydrocarbons at a commercial flow rate. Yet by the alleged force of directives which do not comply with its own law, the Ghanaian state now seeks to compel a scenario where not only is the Sankofa field combined with [the] Afina discovery, but where the Ghanaian owners of the untested and unappraised discovery are granted a staggering 55.54 percent equity interest in the proposed joint producing multi-billion-dollar asset,” the companies said.

The energy giants said the practical impact of Ghana’s unlawful unitisation is currently being played out in the Ghanaian courts, saying “emboldened by Ghana’s actions, Springfield is currently suing the claimants (Eni and Vitol) to enforce its alleged rights in the Sankofa field which the unlawful directives seek to establish.”

Background to the case

In April 2020, the Ministry of Energy in a letter signed by the former Minister, John Peter Amewu, directed Eni and Springfield Exploration to unitise their fields—Sankofa and Afina.

The decision resulted from a series of engagements and analysis of post-drill data, which showed that the Afina discovery in the West Cape Three Points-2 block, belonging to Springfield, and Eni’s Sankofa field in the Offshore Cape Three Point contract area straddle.

However, Eni, not in support of the directive, has together with Vitol, its project partner, sued the government and GNPC for what it described as an unlawful attempt to impose a unitisation of Sakofa oil field and Afina on its operations.