A Hight Court in the Republic of Ghana, West Africa, presided over by Justice Mariama Sammo (MS) has ordered Italian oil and gas firm, ENI and Vitol, to set aside 30 percent of oil proceeds from the Sankofa Field in an escrow account, pending the final determination of an application filed by Springfield E&P, a wholly Ghanaian upstream player.
Springfield E&P filed a suit at Ghana’s Commercial Court ‘3’ Division of the Accra High Court following Eni’s refusal to unitise the Afina oil block held by Springfield E&P and Sankofa Field operated by Eni and Vitol because the two oil blocks are said to straddle.
The two oil companies were directed to unitise the two fields by the Ministry of Energy about a year ago but it has since not happened.
Among the reliefs sought by Springfield was an order directed at the Defendants to comply with the directive issued by the Minister of Energy in the letter of 9th April 2020 and enter into an agreement forewith Plaintiff to produce and develop the accumulation of the petroleum in the Sankofa and Afina fields as a single unit.
The oil firm also wanted the court to direct that “any income, profits and other finds due Plaintiff from Defendant’s exploration and production activities in the Sankofa Fields be paid to the Plaintiff upon account having been taken”.
Eni and Vito are expected to pay an amount approximately $40million a month which will be directed to an account agreed by both parties.
The court’s order takes effect from today.
Commenting on the ruling, Kevin Okyere, CEO and founder of Springfield, described the ruling as a “welcome vindication of Springfield’s position on the issue of unitization and a positive result”. He said that the Company was forced to take the legal route following Eni’s reluctance to follow the Minister of Energy’s directive and for all parties to reach an amicable resolution to this unfortunate impasse.
Kevin added “Springfield is not interested in stalling ongoing crude oil production on the Sankofa Field, and believe in fairness and justice for all, irrespective of their size and position. The consequences of this case for the Ghanaian oil industry will be systemic and immediate”.
Regional oil and gas actors have been under severe pressure following disruptions caused to supply chains in the wake of the Covid-19 pandemic and market changes triggered by the global energy transition. In the light of such unprecedented challenges, Springfield believes Ghana cannot afford to delay development of a flagship project capable of contributing significantly to the State’s coffers and ultimately improve the standard of living of Ghanaians.
Kevin concluded by saying that, “Springfield looks forward to working with Eni as the operator of the unitized field in maximizing the production and the economic benefits for all stakeholders, including the Government and citizens of Ghana”.
RULING (SPRINGFIELD V. ENI & VITOL)
Source: energynewsafrica.com