The Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, has provided a critical analysis of the government’s handling of the arbitration ruling on oil block unitization between Springfield Exploration and Production Limited (Springfield) and Eni Ghana Exploration and Production Limited (ENI).
Benjamin Boakye noted that the former government’s leadership maintained a rigid position on the arbitration ruling concerning the Offshore Cape Three Points (OCTP) oilfield.
However, he suggested that the current government’s eventual shift in approach resembled a “Damascus moment”—a drastic reversal of an entrenched stance.
The ruling determined that the government of Ghana had misinterpreted its own laws in issuing directives related to the unitization of the Afina and Sankofa fields.
However, despite the clear ruling against the directive, the Attorney General at the time framed the outcome as a victory.
“The then Attorney General argued that the OCTP partners had sought nearly $1 billion in damages—a claim that was contingent on Ghana enforcing the directive—therefore he won the case. Since the court ultimately blocked the directive, the claim never materialized.”
Benjamin Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP)
The government’s continued enforcement of the directive, even after the ruling, suggested internal recognition that the scientific basis for unitization was not conclusive. Boakye pointed out that this raised questions about Ghana’s regulatory decision-making process.
Boakye also highlighted that the oil industry operates on strict commercial principles, unlike government budgets where financial misappropriations can be absorbed by the public.
He warned that private sector players have the capacity to resist regulatory actions perceived as unfair.
“This should serve as a crucial lesson for local businesses looking to enter the upstream sector: risks are real, and political backing alone is not a sufficient safeguard.”
Benjamin Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP)
Ghana’s Ministry of Energy and Green Transition has officially withdrawn the previously mandated unitisation directives between Springfield Exploration and Production Limited (Springfield) and Eni Ghana Exploration and Production Limited (ENI).
The directives, which were initially issued by the Ministry of Energy in 2020, required a compulsory unitisation between the two oil companies concerning the Afina-1X Discovery and the Sankofa Cenomanian Oil Field.
This announcement follows a comprehensive review of the Arbitral Award SCC Arbitration U2021/114 (ENI & Vitol v. Ghana & GNPC) dated 8th July, 2024.
The Ministry’s decision also comes after receiving a legal opinion from Ghana’s Attorney General and Minister of Justice, which took into account the Tribunal’s analysis.
Proposed Solutions for Ghana’s Oil Sector
To address the fallout from the arbitration ruling, Boakye recommended that the government suspend the relinquishment requirement on WCTP Block 2 for three more years.
This, he argued, would provide Springfield, the indigenous oil company at the center of the dispute, additional time to engage with industry stakeholders on purely commercial terms.
“Encouragingly, the industry is already responding, with companies reactivating sustenance capital and revising investment plans to unlock upstream potential.”
Benjamin Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP)
He also acknowledged the efforts of key figures in Ghana’s energy sector, including former President John Dramani Mahama, former Deputy Minister of Energy John Jinapor, and Dr. Dominic Ayine, for prioritizing the national interest in managing the oil sector challenges.
The withdrawal of the unitisation directives marks an important development in Ghana’s ongoing efforts to manage its petroleum resources effectively. The decision underscores the Ministry’s commitment to ensuring compliance with the legal and regulatory framework governing the oil and gas sector.
Boakye’s analysis underscores the need for Ghana’s government to act as a fair and transparent regulator, ensuring that both local and foreign investors in the oil sector operate within a commercially viable framework.
His recommendations, particularly on extending the relinquishment requirement for Springfield, present a potential path forward to restore confidence in Ghana’s oil industry.
As Ghana navigates its regulatory and commercial challenges, industry stakeholders will be keenly watching for further government actions that could shape the future of its upstream oil sector.
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