Workers at Eni Ghana Exploration and Production Ltd, deeply committed to the integrity of their work, are voicing concerns about potential irregularities in the unitization of the Afina discovery in the West Cape Three Points Block 2 Area (WCTP2) and the Sankofa field in the Offshore West Cape Three Points Block Area (OCTP), a contentious issue that has persisted since 2020.
In a formal petition addressed to the Minister of Energy, the General Transport, Petroleum, and Chemical Workers Union expressed their deep concern about the lack of resolution in the matter, highlighting its adverse impact on the investment climate of the OCTP Project and the broader upstream business environment.
This situation has raised fears of potential job losses among the union’s members.
The union has been actively monitoring the directives and legal actions surrounding the unitization initiated by Springfield Exploration & Production Ltd against Eni Ghana and its partner, Vitol Upstream Ghana Limited. These actions followed unitization directives issued by the Ministry of Energy on April 9, October 14, and November 6, 2020.
The union suspects governmental misconduct and has criticized the government’s apparent disinterest in implementing the Final Arbitration Award issued by the International Arbitral Tribunal on July 8, 2024.
The tribunal’s ruling found that Ghana had breached its laws and the OCTP Petroleum Agreement by issuing the unitization directive for the Afina discovery and the Sankofa field.
The union, hopeful for a positive resolution, urges a retraction of these directives until all unitization parameters are appropriately addressed. They have requested an urgent meeting with the Minister on August 26, 2024, to discuss these concerns further.
Eni and Vitol initiated arbitration proceedings in 2021 against the Republic of Ghana and the Ghana National Petroleum Corporation (GNPC) for alleged violations of the OCTP Petroleum Agreement.
The Arbitral Tribunal’s ruling in July 2024 supported Eni and Vitol’s position, declaring the unitization directives unlawful and highlighting multiple flaws in the Ministry’s approach.
The tribunal’s decision has preserved Eni and Vitol’s right to claim damages should Ghana attempt to enforce the disputed directives.
The prolonged dispute has affected the investment climate and Ghana’s reputation as a favourable investment destination. Not all new oil and gas fields have been developed since 2017, and the competitive bidding for Block 3 in 2019 failed to materialize due to an unattractive investment climate.
The OCTP project’s reduced output has negatively impacted the state’s oil revenues and tax receipts.
Local businesses and employees are also feeling the strain.
The challenging investment environment has stifled growth and could lead to job losses, affecting over 2,000 direct and indirect jobs supported by the OCTP project. Furthermore, local companies that have benefited from OCTP contracts face reduced opportunities due to the ongoing legal disputes.
Eni Ghana, operating the OCTP fields since 2009, has significantly contributed to Ghana’s energy sector, including building infrastructure and supporting local communities.
The dispute over unitization continues to affect various facets of the oil and gas sector, from production to local content and tax revenues. However, the workers’ determination to continue their fight underscores the need for a resolution to restore stability and confidence in Ghana’s upstream industry.
