Part of Revenue from Eni's Sankofa Field to Go into Escrow, Ghana Court Rules

Christian Akorlie
Friday, June 25, 2021

A commercial court in Ghana on Friday ordered that 30% of revenues from an Eni-operated oilfield be placed in an escrow account, granting a request by the local operator of an adjacent field over Eni's objections.

Springfield, which operates the Afina oilfield neighbouring Eni's Sankofa offshore field, had asked the court to preserve revenue from Sankofa until a deal is reached to combine the projects and each gets a share.

The court said its decision would protect the interests of Springfield while allowing Sankofa, which produces over 50,000 barrels of oil per day, to continue operating and cover costs.

Eni said in a statement that it would review the ruling to assess the impact on its operations.

"We fully expect to take the appropriate steps necessary in order to protect our operations in the country, including appealing against this ruling," it said.

Ghana's energy ministry ordered the two oilfields last year to combine in order to reduce production costs.

Eni and partner Vitol have argued there was no basis for Springfield's Afina discovery to be considered commercially viable and that the ministry's order was premature.

Springfield has taken the matter to court to force Eni to comply with the order, an Eni spokesperson said on Thursday, adding that Springfield's move had stalled discussions between the companies about resolving the dispute.

Springfield Chief Executive Kevin Okyere welcomed the revenues ruling as a "vindication of Springfield's position".

The company said the revenues placed in escrow would amount to approximately $40 million per month.

Sankofa, which has been producing oil since 2017, is part of Eni's Offshore Cape Three Points project off the Atlantic Coast. Eni says the project has reserves of about 500 million barrels of oil and 40 billion cubic metres of unassociated gas.

Springfield says Afina, discovered in 2019, holds 640 million barrels of oil and no gas, while the whole block has 1.5 billion barrels in total, which includes other discoveries. 

(Reporting by Christian Akorlie Additional reporting by Bate Felix Writing by Alessandra Prentice Editing by Cooper Inveen and David Evans)

Categories: Activity Production Africa Regulations

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