Eni Ghana, operator of the Sankofa Field, will support unitising the field with Springfield’s Afina if data supports doing so.
The Rome-based oil firm, which says it stands ready to comply with any decision that works in both the interests of the people of Ghana and Eni, is however calling for an open channel of dialogue involving all stakeholders in order to reach a consensual outcome reflective of applicable laws, relevant agreements and industry best practices.
“We are in no way against evaluating the possibility for unitisation in dynamic communication, and agreeing unitisation is warranted for the purposes of ensuring optimum recovery should sufficient and reliable subsurface data show that the Sankofa Field and Springfield’s Afina discovery are straddling,” Eni Ghana’s Managing Director, Giuseppe Valenti said.
Mr. Valenti, in a written response to questions by the B&FT concerning a ministerial directive to merge its Sankofa Field with Springfield’s Afina, said: “To date, despite our availability, we have not received discovery data to ascertain whether the Afina discovery (which was drilled one year ago and never tested) and the Sankofa oil field (which has been in production for about three and half years) are straddling the licence border, are in dynamic communication; and whether unitisation or any other form of coordinated development would be appropriate in accordance with Ghanaian law”.
Per standard practices, unitisation – the process whereby an oil or gas reservoir straddling multiple licence areas is jointly developed by the holders of each licence – combines nearby fields that turn out to be part of the same geological structure.
The process is usually backed by data, but Mr. Valenti said no data has been made available for Eni to support merging the two fields. “To the best of our knowledge, there has not been any appraisal of the Afina discovery that would establish its commerciality and allow the parties to progress on the unitisation process.”
Likewise, he said, not all discoveries are producible – owing to factors such as nature of the reservoir rock or of the fluid properties, hence the need for such a decision to be backed by data.
A key principle of unitisation is that the straddling reservoir is physically developed as though the boundary between the licence areas does not exist. Unitisation has become the global norm for the development of straddling reservoirs; not only because the joint development of a straddling reservoir is generally more economical and efficient than separate developments by the adjacent contract groups, but also because it clarifies the rights of licensees which hold rights to develop the reservoir.
Buttressing his stance, he indicated that Afina is a recent discovery based on only one well, which has not been tested and therefore not fully assessed or evaluated. And without such an appraisal, there can be no data to ascertain, definitively, that the resources discovered by Afina well are producible.
“As a matter of fact, we have wells in the Sankofa Field that are showing how properties are deteriorating nearing Springfield’s licence, with reduced mobility of fluids when compared to other areas of the same reservoir – such as to be abandoned because they are not capable of producing commercial quantity of oil, as our partners and PC are well aware. This creates doubts as to whether the area of Springfield’s discovery is commercially producible,” he further said.
“What we request of the stakeholders is an appropriate amount of time, with the appropriate data and further appraisal activities in order to conduct a proper analysis of the situation,” he concluded.
In a letter dated October 14, 2020, the Minister of Energy, John Peter Amewu, ordered Eni Ghana and Springfield, a local firm, to merge the Sankofa and Afina Fields. This came after government’s earlier directive to Eni and Springfield – to begin talks on combining their adjacent oil and gas fields in April – had not been met by the September 18, 2020 deadline.
The ministry said that seismic data had indicated Eni’s Sankofa offshore field, which entered production in 2017, and Springfield’s recently discovered Afina had identical reservoir and fluid properties; and so the decision was made to ensure optimum exploitation of the Afina and Sankofa Fields. “Regrettably, it has become obvious that the parties do not intend to comply with the Ministry of Energy’s directives,” said the letter signed by Mr. Amewu.
The Sankofa Field is part of the OCTP-Offshore Cape Three Points integrated oil and gas project developed and operated by Eni in a joint venture with Vitol and Ghana National Petroleum Corporation.
Gas was first discovered in 2009 and oil in 2012: the field has been steadily producing oil since 2017 and gas since 2018. While the oil is exported, the gas is entirely destined to local consumption, guaranteeing safe, stable, reliable fuel for Ghana’s power plants. Sankofa has reserves of about 40 billion cubic meters of natural gas and 500 million barrels of oil; meanwhile, the Afina Field, operated by Springfield – a wholly Ghanaian-owned company, has 1.5 billion barrels of oil in place.