The Deputy Minister designate for Energy, Mr Andrew Egyapa Mercer, has called for a third party assessment on the unitisation of the Springfield and the ENI oil fields.

He said that would help the country get the full benefit from the oil fields.

“This issue is a straightforward one: normally, it is clear on what will warrant the unitisation of two adjourning blocks. To the effect that, when there is some acquisition that straddles two contractual areas, in order to derive economies of scale, we unitise it, so that one operator will explore the resources.

“I believe that was what informed the directive by a former Minister of Energy, Mr John Amewu, for Springfield and ENI to unitise because the Sankofa block straddled both fields. My understanding is that the directive that was issued had with it some percentage of track participation in the field which inured to the benefit of Springfield, as opposed to ENI, and this has led to ENI objecting to the directive.

“Some third party assessment ought to be made to determine whether, indeed, the percentages that the minister issued which were based on an assessment by the Ghana National Petroleum Corporation were the true reflection,” he said.

The Deputy Minister designate said this when he appeared before the Appointments Committee of Parliament yesterday.

Background

The government directed Springfield and Eni Ghana, a subsidiary of the Italian oil giant, to link (unitise) their neighbouring discoveries —Springfield’s Afina discovered in the West Cape Three Points (WCTP2) and Eni’s Sankofa field, also Offshore Cape Three Points (OCTP) — because the fields overlap.

The directive has, however, not been complied with due to a disagreement.

Mr Amewu had, in April 2020, in accordance with Section 34(1) of the Petroleum (Exploration and Production) Act, 2016 (Act 919), given the directive with respect to the Sankofa field in the OCTP and the Afina discovery in the WCTP contract areas.

Section 34 (1) of Act 919 provides: “Where an accumulation of petroleum extends beyond the boundaries of one contract area into one or more other contract areas, the minister in consultation with the commission may for the purpose of ensuring optimum recovery of petroleum from the accumulation of petroleum, direct the relevant contractors to enter into an agreement to develop and produce the accumulation of petroleum as a single unit.” 

Prior to the directive, the minister had expressed satisfaction with a geophysical and geological analysis in March 2018, which showed that the Sankofa Cenomanian Reservoir extended into the WCTP Block 2 contract area.

No fraud in PDS deal

Mr Mercer also maintained that PDS had not been involved in any fraudulent activity as far as its transaction with the Electricity Company of Ghana (ECG) was concerned.

He said what happened had to do with some material breaches and could not be termed as fraud.

“I disagreed strongly with the then Minister of Energy for his choice of words in describing the transaction as fraudulent and I still disagree with him now. I read the statement which was issued by the Minister of Information, who is the official mouthpiece of the government of Ghana, and that statement said government had detected some material breaches and so had proceeded to suspend the transaction pending investigation,” he added.

The deputy minister designate said in the investigation that led to the termination of the agreement, there was nowhere in the official communication that the word ‘fraud’ was used.

“There is a lot of misconception out there with regard to how the PDS transaction ended. The way it ended was unfortunate, but I do not see fraud anywhere,” he said.

No role

Mr Mercer also denied his involvement in the whole PDS transaction, saying: “I did not play any role in the PDS transaction. I am not a director or shareholder of PDS”.

He, however, acknowledged that he was a director of one of the companies which were shareholders of PDS.

“In 2014, I was engaged to incorporate a company for a client of mine who asked me to be a director and secretary to the company, which is usual for law practitioners. It turned out that the company, which is called TG Energy, went into some joint venture to bid for the ECG process and ultimately when it won, incorporated a company called PDS,” he explained.

According to him, corporate law principles were quite clear that a company was separate and distinct from its shareholders, and PDS, when it incorporated, had its own directors and secretary.

“It is clear who the directors and shareholders are and there is nowhere that my name appears in it,” Mr Mercer said.

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