Eni Sues Ghana In London Over Attempt To Force Unitisation Directive On Their Throat

Italian oil and gas firm, Eni, has filed a suit at the International Tribunal in London, United Kingdom, to challenge a directive by Ghana’s Ministry of Energy, asking them to unitise Sankofa offshore oil field and Afina oil block operated by Springfield E&P, a wholly Ghanaian upstream player.

According to thesaurus, unitisation is the joint development of a petroleum resource that straddles territory controlled by different companies

In a statement filed by three renowned lawyers namely Craig Tevendale, Andrew Cannon and Charlie Morgan from Herbert Smith Freehills LLP, Eni is seeking five reliefs from the Tribunal.

The claimant wants the Tribunal to declare that the purported 9th April Directive, 14th October Directive, 6th November Directive and any other steps taken to implement those directives represent a breach of contract under the Petroleum Agreement.

The claimant also wants the Tribunal to declare that the respondents take no further action to implement the purported unitisation of the Sankofa Field and Afina Discovery on the terms of the purported 14th October Directive, the Draft Unitization and Unit Operating Agreement (UUOA) sought to be imposed by purported November Directive or otherwise.

The third relief the claimant is seeking is an order that the respondent pays damages in an amount to be quantified for the losses suffered by the claimant arising out of the respondent’s breaches of the petroleum agreement, Ghanaian law and International law on a joint and several basis.

Additionally, the claimant is seeking and order that the respondent pays all of the costs and expenses of the arbitration including the fees and expenses of the claimant counsel and any witnesses and/or experts in the Arbitration, the fees and expenses of the Tribunal and the fees of the SCC on a joint and several basis and /or an order such further or other relief as the tribunal may in its discretion consider appropriate.

It would be recalled that in April 2020, Ghana’s former Minister for Energy, John Peter Amewu issued a directive to Eni and Springfield E&P to begin talks and combine their adjacent oil and gas fields in April and gave them until September 18 to reach an agreement.
The Minister’s directive said that seismic data had indicated Eni’s Sankofa offshore field, which entered production in 2017, and Springfield’s Afina Discovery had identical reservoir and fluid properties.
“Regrettably, it has become obvious that the parties do not intend to comply with the ministry of energy’s directives,” the letter signed by Minister John Peter Amewu said.

More than a year after the directive, both Eni and Springfield E&P have failed to unitise the Sankofa offshore field and Afina Discovery.

Unhappy with the development, Springfield took the case to a high court in Accra, capital of Ghana.

The court in its ruling recently directed Eni to escrow 30 percent of proceeds from the Sankofa offshore field pending the final determination of the case.