Union petitions Minister over Afina, Sankofa fields

The General Transport, Petroleum and Chemical Workers Union has appealed to the Minister of Energy to withdraw the directive for the unification of the Afina and Sankofa oil fields which was the subject of a recent court of international arbitration order.

The Minister of Energy on April 9, 2020 and repeated on November 6, 2020 directed the unification of Afina Discovery in West Cape Three Points Block Two area (WCTP2) operated by the Ghanaian firm, Springfield Exploration & Production Ltd, and the Sankofa Field in Offshore Cape Three Points area (“OCTP”) operated by the Italian firm, Eni, and its Swiss-based Dutch multinational, Vitol Upstream Ghana Limited.

The union said the urgent intervention to retract the unitisation directives until all the parameters for that were fulfilled, would help restore the confidence of partners developing and producing the Offshore Cape Three Points (OCTP) oil blocks.

Additionally, it said it would encourage them to maintain their investments in OCTP and the CTP Block 4. “This action will further help prevent decisions that could lead to job losses and negatively affect the state and the livelihoods of numerous families,” the union, which is an affiliate of the Trades Union Congress (TUC), said in a petition dated August 8, 2024 and addressed to the Minister of Energy.

General Secretary

It was signed by the General Secretary of the union, Fuseini Iddrisu.

“It would further boost investor confidence in the upstream sector considering that most upstream investors are interested in how this matter is being handled to its conclusion,” the petition stated.

The union, per the petition, also requested for a meeting on August 26, 2024 between the Minister of Energy and the leadership of the union to further discuss its position on the withdrawal of the directives.

The union said while it supported the purpose of unitisation for the optimum recovery of petroleum resources and/or to enhance the efficient exploitation of petroleum resources, “we have observed with grave concern that the state's failure to resolve this issue and bring a decisive conclusion to the matter has significantly impacted the investment climate of the OCTP Project, including the general upstream business environment, resulting in potential job losses for our members”.

It said it acknowledged the Final Arbitration Award made by the international Arbitral Tribunal under the auspices of the Arbitration Institute of the Stockholm Chamber of Commerce, Stockholm, Sweden on July 8, 2024.

Agreement

“This award clearly determined that Ghana breached its own laws and the OCTP Petroleum Agreement by issuing the directive for the unitisation of the Afina discovery and Sankofa field,” the General Transport, Petroleum and Chemical Workers Union said.

Accordingly, it expressed the belief that as the country was duly represented at the hearing of the arbitration, the State would quickly do what was required and see to the implementation of the award which was final and binding on the parties and also withdraw “the flawed unitisation directive”.

“We, therefore, respectfully request that your good self; as a matter of urgency, intervene in this matter by retracting the directives regarding the Unitisation Directives until all the parameters for unitisation are fulfilled,” the Mr Iddrisu-led group said.

The union is confident that withdrawing the directives would also help to boost investor confidence in the upstream sector, considering that most upstream investors are interested in how the matter is being handled to its conclusion. 

Background

In April 2020, the Minister of Energy directed that the Afina oil block held by Springfield E&P and Sankofa Field operated by Eni and Vitol should be unitised because the two oil blocks are said to straddle.

The directive required that an agreement should be reached for the development and production of the blocks because the accumulation of the petroleum in the Sankofa and Afina fields were a single unit.

However, Eni refused to heed the directive, insisting that both appraisal and commerciality had to be established before any unitisation process could take place.

In June 2021, the Ghanaian oil and gas exploration and production company, Springfield, won a ruling at the Accra High Court (Commercial Division) ordering the Italian-Swiss oil and gas consortium, ENI and Vitol, to set aside 30 per cent of oil proceeds from the Sankofa Field in an escrow account, pending the final determination of an application filed by Springfield E&P.

Dissatisfied with the directive and ruling, the consortium triggered the jurisdiction of the International Tribunal on September 1, 2021.