Dr Theo Acheampong comments on outcome of Ghana-Eni arbitration dispute
Economist and Political Risk Analyst, Dr Theo Acheampong, has said he is not surprised at the outcome of Ghana’s arbitration dispute with Eni and Vitol on the unitisation of the Eni and Springfield oil fields.
In a post on X formerly Twitter, Dr Acheampong averred that although countries have the right to ask oil exploration firms to unitise oil fields to exploit the country’s petroleum resources efficiently, the process of doing so matters.
“What I said in Sept 2021 and always maintained… The outcome of the Ghana-Eni arbitration dispute is not surprising. I’ve held the same view since Day 1 of this debacle. Drilling an appraisal well to confirm unitisation had become ‘wahala’ due to people’s vested interests. The oil industry doesn’t run on the administrative fiats of ministers but on established protocols/processes,” he tweeted.
“You cannot shortchange that. Ghana lost on the substantive issue. Every country [it is common knowledge] has the right to ask parties to unitise oil fields to exploit their petroleum resources efficiently. However, the process of doing this matters. The Arbitral Tribunal found that “in the circumstances in which they were issued,” the Unitisation Directives breached the Petroleum Agreement. That is, the unitisation was contrary to the applicable regulations and thereby breached Article 26(2) of the Petroleum Agreement,” he further tweeted.
The International Arbitration Tribunal has issued its final award in the Eni & Vitol versus Ghana and Ghana National Petroleum Corporation (GNPC) case, delivering a favourable outcome for Ghana.
The Tribunal denied Eni and Vitol their monetary damages, which initially stood at $7 billion but were later reduced to $915 million plus interest by the end of the proceedings.
All claims against the GNPC were dismissed entirely.
Additionally, the Tribunal rejected the Claimants’ request to declare that Ghana breached the Petroleum Agreement by “refusing to withdraw or prevent reliance by third parties on the Unitisation Directives.”
The Tribunal also dismissed the Claimants’ request for Ghana to notify the High Court, Court of Appeal, and Supreme Court of Ghana that the Unitisation Directives were issued in breach of the Petroleum Agreement.
However, the Tribunal did find that “in the circumstances in which they were issued,” the Unitisation Directives breached the Petroleum Agreement.
Specifically, the unitisation was contrary to the applicable regulations, thereby breaching Article 26(2) of the Petroleum Agreement.
Despite this, the Tribunal affirmed Ghana’s sovereign right to unitise oil fields to achieve efficient exploitation of the deposits.
Regarding the allocation of fees and costs, the Tribunal determined that since both Parties had prevailed in some respects, each would be required to pay their own legal fees and costs.
