THE COURT of Appeal has dismissed an appeal filed by ENI Ghana Exploration and Production Limited and Vitol Upstream Ghana Ltd. challenging the decision of an Accra High Court ordering it to pay 30% of its revenue from the sale of crude oil into an escrow account.
The High Court, presided over by Justice Mariama Sammo, on June 25, 2021, ordered the two companies to pay the funds into an interest-bearing account until the final determination of a case brought against them by Springfiled over their failure to unitise.
Springfield has a contractual right to the exploration and production of petroleum over an area known as the West Cape Three Points 2 Block (WCTP-2) while ENI and Vital also have contractual right to the exploration and production of petroleum over an area known as Offshore Cape Three Points Block (OCTP).
The Minister of Energy in April 2020, directed Springfiled and ENI as well its partner company, Vitol to enter into a unitisation agreement to develop and produce the accumulation of petroleum as a single unit from their Sankofa and Afina fields respectfully.
Springfiled, however, went to court for the enforcement of its right, as a result of failure on the parts of ENI and Vitol to comply with the Minister’s directive for the companies to enter into a unitisation agreement for purposes of developing and producing the accumulation of the petroleum straddling in both fields as a single unit per Section 34 of Act 919.
It is their case that while the defendants have failed to comply with the directive to unitise, they continue to produce petroleum which has straddled their respective fields thereby enjoying the proceeds, funds, revenue and monies earned, to the exclusion of Springfiled.
The suit is therefore, seeking an order on the defendants to comply with the April 9, 2020, directive by the Minister of Energy to produce and develop the accumulation of petroleum in the Sankofa and Afina fields as a single unit.
It is also seeking among others, an order on ENI and Vitol to render account to Springfiled in respect of monies accrued by them from 2009 when they commenced exploration of the said filed and order on the defendants to pay any income and profit due to plaintiff from defendant’s exploration in the Sankofa filed upon account been taken.
Lawyers for Springfiled, prior to the determination of the case filed an application for an order for the preservation of funds, revenue and monies earned or paid to the defendants in the exploration of and production of petroleum in the Sankofa Field.
The court in its ruling ordered that “30% of all funds, revenue and monies earned or to be paid to and/or accruing from the exploration and production of petroleum by the defendants from the Sankofa Filed shall be preserved and in the interest of the parties shall be deposited in an interest-bearing account with a bank to be agreed between the parties”.
It was this order that ENI and Vitol went to the Court of Appeal to challenge, hoping it is reversed by the appellate court.
The Court of Appeal, in a unanimous decision, dismissed the appeal in its entirety as being unmeritorious and awarded a cost of GH₵10,000 against ENI and Vitol.
BY Gibril Abdul Razak