Supreme Court quashes application of appeal by ENI on escrow account
An application for special leave to appeal the Court of Appeal’s affirmation of the High Court’s ruling on the deposit of 30% ($40 million) of the revenue from the sale of crude oil from the Sankofa field into an escrow account by ENI SpA has been dismissed by the Supreme Court.
Per the Supreme Court’s decision, Eni and its partner – Vitol – have no other option but to comply with the High Court ruling and retrospectively pay the 30% revenue from the sale of crude oil from 25 June 2021 to date into the escrow bank account.
An Accra commercial court on Friday, June 25, 2021, ruled that 30% of revenue from an ENI-operated oilfield be placed in an escrow account. Springfield, which operates the Afina oilfield neighbouring ENI’s Sankofa field, had asked the court to preserve revenue from Sankofa until a deal is reached and each company gets a share.
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 costs.
Oilfields that straddle each other are required under Ghanaian law to combine operations in order to reduce production costs.
But Eni and its partner Vitol have argued that there is no basis for Springfield’s Afina discovery to be considered commercially productive and that an order last year from the Ministry of Energy to combine the oilfields was premature.
ENI is the operator of the Sankofa oil field with reserves of roughly 500 million barrels of oil and 40 billion cubic metres of unassociated gas.
Springfield on the other hand is the operator of the Afina oil field with 1.5 billion barrels of oil and approximately 19.8 billion cubic metres of gas.
