A COMMERCIAL High Court in Accra on Friday ruled in favour of Springfield Exploration & Production Limited (SEP)’s application to freeze 30% of revenues received by Eni and Vitol from the sale of crude oil from the Sankofa Field, operated by Eni Exploration and Production Ghana Limited.
This follows an ongoing unitisation dispute between Eni and Springfield.
The payment, which amounts to approximately $40 million a month, will be directed to and preserved in an account agreed by both parties until a deal is reached.
The court’s order took effect from Friday, June 25, 2021.
By the ruling, Ghana moves one step closer to developing a major deepwater oil discovery, operated by SEP, an independent African company and operator of the offshore West Cape Three Points Block 2 (WCTP 2).
The court said its decision would protect the interests of Springfield while allowing Sankofa, which produces over 50,000 barrels of oil per day, to continue operating and cover its costs.
Commenting on the ruling, the Chief Executive Officer (CEO) and founder of Springfield, Kevin Okyere described the ruling as a “welcome vindication of Springfield’s position on the issue of unitisation.”
He said that the company was forced to take the legal action following Eni’s reluctance to follow the Minister of Energy’s directive and for all parties to reach an amicable solution to this unfortunate impasse.
Mr. Okyere added, “Springfield is not interested in stalling ongoing crude oil production on the Sankofa Field but believes 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 living standard of Ghanaians.
Mr. Okyere indicated that, “Springfield looks forward to working with Eni as the operator of the unitised field in maximising the production and the economic benefits for all stakeholders, including the government and citizens of Ghana.”
The companies have been in dispute since an April, 2020 directive was issued by Ghana’s Ministry of Energy to unitise the Afina and Sankofa fields for the purposes of ensuring optimal recovery of the resources in the common reservoir in the interest of all the parties involved, including the state.
Oilfields that bestride each other are required to combine in order to reduce production costs.