Think tank urges government to state its position on unitisation stalemate
The government has been encouraged to state its current stance on the ongoing unitisation impasse between ENI Ghana and Springfield Exploration and Production.
The call on the government to break its silence on the matter and assert its position falls among the many recommendations made by the Institute for Energy Security (IES) in a report following the think tank’s research into the ongoing impasse.
The recommendation also comes on the back of the belief by the Ghanaian citizenry that government is to be largely blamed for the ongoing unitisation stalemate.
Per the findings contained in the report published by the Institute for Energy Security (IES), the government’s “actions and inactions were identified as key factors contributing to the stalemate.”
The key findings drawn from sampling the opinions of persons in the media, government, academia, think tanks, CSOs, petroleum industry, and the business community, however, asserts that despite being the ‘cause’ of the stalemate, the government is still the only “body most capable of bringing finality to the impasse.”
According to the IES, the government stating its position on the matter is necessary to clear any misconceptions and misgivings held by the public as well as the two oil firms involved in the impasse.
Additionally, the government has been urged to continue to play the role of a mediator to help the two oil firms overcome the resistance to a workable solution providing guidance to the parties and assist in the implementation of agreed roadmaps.
Related Story: Government ‘blamed’ for ENI-Springfield unitization stalemate – Report
Recommendations made by the IES to the government on the unitisation impasse are as follows;
- Government must break its silence on the matter, indicating the progress made so far, and its current stance on the unitization directive issued to the parties. This is necessary to clear any misconceptions and misgivings held by the public, and the parties to the discussion. As part of its accountability to the public, Government must make public the outstanding issues, and state the level of cooperation from the parties, in getting issues addressed.
- Government must continue to play the role of a mediator to help the two oil firms overcome the resistance to a workable solution. As an arbiter, it must provide guidance to the parties and assist in the implementation of agreed roadmaps. Government must also provide clear timelines for such engagement to be conducted in a more transparent and fair fashion. Should the State fail to engage the parties in a manner that instill confidence at the table, little can be achieve in the resolution of the dispute.
- A possible out of Court settlement must be considered, with Government urging the parties i.e. ENI and Springfield to stay proceedings in Court and agree on mutually accepted timelines to resolve the impasse in the Boardroom. Should the parties fail to reach a resolution within the agreed period and timelines, the Court proceedings can be revived. A stay of proceedings in the Court may be necessary in removing bad faith and build some level of trust among the parties, leading to an amicable resolution of the dispute.
- Given that data is key in making decisions, GNPC and ENI must be willing to exchange their maps with the polygon used by both parties in calculating their Stock Tank Oil Initially in Place (STOIIP). It must be noted that the Review Committee identified “Area” as one of the key parameters that resulted in the differences in STOIIP. The map with the polygon used by both GNPC and ENI in calculating their respective STOIIPs could be helpful in ascertaining the vast variation in STOIIP.
Both ENI Ghana and Springfield are yet to abide by the directive of government to unitize their respective oil fields by signing a Unitisation and Unit Operating Agreement (UUOA).
Government’s unitisation directive is primarily due to ENI’s rejection of government’s position on the matter.
While Springfield’s position aligns with government’s, of evidence of a common reservoir, ENI is of the opinion that there is no dynamic or hydrocarbon communication between the Sankofa and Afina fields and as a result is questioning and largely rejecting the imposition of the unitization terms and conditions.
The Sankofa oil field is part of ENI’s Offshore Cape Three Points project off Ghana’s Atlantic Coast, which it says has reserves of about 40 billion cubic meters of gas and 500 million barrels of oil.
The Afina oil field which was discovered by Springfield in 2019, is said to contain 1.5 billion barrels of oil and 0.7 trillion cubic feet of gas.
