Forced unitisation is non-beneficial to Ghana’s upstream sector – Petroleum expert

Petroleum Expert, Dr. Yusif Sulemana has described the suit filed by Italian oil and gas firm, Eni against the Government of Ghana at the international tribunal in London as a bad precedent to the viability of Ghana’s upstream sector.

Eni is challenging a directive by the Energy Ministry, asking them to initiate Sankofa Offshore oil fields and Adubea Oil Block.

Speaking to Joy Business, Dr. Yusif Sulemana, outlined the repercussions of the suit, saying the impact of the suit can affect negatively the productivity of the firm.

 “Unitisation can be compelled to happen in international jurisdiction. However it’s always better and more reasonable that unitization is done voluntarily, especially by the agreed parties because what normally happens is that we need to share data and once you are not unitizing and it is not in this type that means that data sharing is going to be difficult.”

“So, I see two impacts; whenever somebody or an industry player has court issues pending, it is always a diversionary activity that can impact you”, he added.

This he said is not entirely good for the upstream oil and gas sector because “we are in an era where we have to encourage system players to stay in the industry, so this case going to the tribunal is not a positive development. “

Dr. Sulemana stressed that some firms will not be able to optimise oil extraction independently unless they unitize, noting, that it would have been excellent if the case is solved locally.

Eni files law suit in London challenging unitisation of Sankofa oil field

Italian oil and gas firm, Eni, filed a suit at the International Tribunal in London, United Kingdom, to challenge a directive by the Ministry of Energy, asking the oil firm to unitise Sankofa offshore oil field and Afina oil block operated by Springfield E&P, a wholly Ghanaian upstream player.

According to thesaurus, unitisation is the joint development of a petroleum resource that straddles territory controlled by different companies

In a statement filed by three renowned lawyers namely Craig Tevendale, Andrew Cannon and Charlie Morgan from Herbert Smith Freehills LLP, Eni is seeking five reliefs from the Tribunal.

The claimant wants the Tribunal to declare that the purported 9th April directive, 14th October directive, 6th November directive and any other steps taken to implement those directives represent a breach of contract under the Petroleum Agreement.