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Ghana: Gov’t Orders Eni, Springfield E&P To Combine Oil Fields

  • SOURCE: Petroleum Commission, Ghana | qwesa2big
  • The Government of Ghana has directed Italian oil and gas firm, Eni, and Springfield E&P, a wholly owned Ghanaian firm, to begin talks to combine their adjacent oil and gas fields.
    The directive follows a technical analysis which concluded that Afina-1x Cenomanian reservoir operated by Springfield E&P and the Sankofa Cenomanian reservoir, which is operated by Eni, are “one and the same.”

    The government, through the Ministry of Energy, has, therefore, instructed the companies to begin within 30 days the process leading to the unitisation or joint operation of the two fields in order to ensure efficient production.
    The two have 120 days to provide the Ministry a draft agreement.
    “Shall both parties fail to comply with the government’s directive to agree on a Unitisation Agreement, the Minister for Energy is empowered to stipulate the terms and conditions of such an agreement per Regulation 50(6) of L.I. 2359,” a letter from the Energy Minister to the two companies stated.

    SEP is a majority interest holder (84 percent) and operator of the WCTP2 Licence, with the Ghana National Petroleum Corporation and its exploration company, EXPLORCO, holding the remaining interest.
    SEP drilled the Afina-1 well in October 2019, making two gas and light sweet oil discoveries at a water depth of 1,030 meters, and, consequently, more than doubling its proven oil reserves to 1.5 billion barrels and adding 0.7Tcf of gas.

    On the other side, Sankofa is a part of the Eni-operated OCTP Block, where Eni holds a 44.44 percent interest, Vitol 35.56 percent, and GNPC 20 percent.
    The OCTP Block is reported to have reserves of about 40 billion cubic metres of unassociated gas and 500 million barrels of oil, and has been producing since 2017 from the John Agyekum Kufuor FPSO.
    While both operators have until August 2020 to complete their negotiations, the African Energy Chamber in a statement copied to, said it is hopeful that it would result in the very first Unitisation Agreement between an International Oil Company and a Ghanaian operator in the country, ushering a new era for Ghana’s upstream sector.
    The conclusion of such an agreement would ensure efficient reservoir exploitation, avoid unnecessary competitive drilling and maximise economic recovery of the hydrocarbons reserves from both licences.
    This would not be the first such agreement in Ghana.

    In July 2009, a Unitisation and Unit Operating Agreement (UUOA) was signed for the development of the Jubilee Field, appointing Tullow Oil as its operator.
    The field entered into production a year later and has been successfully producing since then, becoming the crown jewel of Ghana’s oil & gas sector.

    “Oil and gas works best with an enabling environment. The Government of Ghana and the Ministry of Energy are demonstrating a very pro-active attitude towards the development of the country’s oil & gas sector. Their directive to push for negotiations on a Unitisation Agreement on Afina and Sankofa to be completed within 120 days is proof of political will that works to benefit the energy sector and the country,” stated NJ Ayuk, Executive Chairman at the African Energy Chamber.

    Fast-tracking the development of these fields is very positive given current market dynamics and ensures that a credible Ghanaian operator will start producing at a time when other players are shying away from investing in Africa’s upstream,” he added.
    “We are very bullish that Springfield E&P can move ahead, make the deal work for Ghana’s oil sector and become a remarkable example of what African E&P companies can achieve for our industry and our continent,” concluded Ayuk.

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