Italian oil exploration company, Eni, has hit back at the Government of Ghana (GoG) for imposing on the company a unitisation deal on the Sankofa and Afina oil fields.
According to the exploration firm ENI which is operating over 700 wells across the world, data from the owners of the Afina oil field Springfield, on the Afina field to enable an assessment to ascertain the veracity of the claim by the Government of Ghana that there is some communication between Sankofa and Afina nor ascertains definitively that the discovered resources are producible has not been shared with them and there has not also been any appraisal of the Afina discovery that would establish commerciality of the Afina discovery and allow the parties to progress on the unitization process.
Without the above ENI says it makes it difficult for them to accept the unitisation deal as presented by the Energy Ministry on behalf of the government of Ghana.
The Government of Ghana (GoG) through the Energy Ministry in a letter to Eni was forcing the company to merge its Sankofa offshore oil field which it operates in a venture with Vitol Holding BV, with the Afina field discovered local oil exploration firm Springfield. This deal the Ministry noted was a unitisation deal which is “to ensure optimum exploitation and recovery of Ghana’s petroleum resources.”
But Eni has rejected the unitisation deal, arguing that Springfield’s Afina field discovery hasn’t been sufficiently tested to show that it shares a reservoir with the Sankofa field.
Eni in responding to questions sent to them by norvanreports stated that Eni and it’s venture partner Vitol are in no way against a unitisation deal as it is a common practice in the oil and gas sector and that Eni itself has engaged in a couple of unitisation deals around the world.
Its resistance to the unitisation deal, however, stems from the fact that there is no sufficient and reliable subsurface data showing that the Sankofa and Afina field discoveries are “straddling in dynamic communication and that unitization is warranted for the purposes of ensuring optimum recovery.”
ENI told norvanreports that to date, “we have not received discovery data to ascertain whether the Afina discovery, drilled one year ago and never tested, and the Sankofa Cenomanian Oil field, which was discovered in 2012 and has been in production for about 3 and half years, are straddling the license border, are in dynamic communication and whether unitization or any other form of coordinated development would be appropriate in accordance with Ghanaian law.”
This raises questions over why the Ministry of Energy rushed to direct the major Italian oil exploration company, Eni and its partner Vitol to go into the unitisation deal when all the laid down procedures have not been followed and the partners have not satisfied themselves with all that is needed for this deal to go through.
Find below responses given to norvanreports by Eni’s employee to some questions asked about the unitisation deal:
On the issue of a potential unitization between Eni’s and Vitol’s Sankofa field and Springfield’s Afina discovery, Eni and Vitol wish to clarify the following:
– Unitizations are a common practice in the oil and gas sector as they allow to maximize production and share production and costs among the parties in the unit on a fair and equitable basis. Eni has been involved in various part of the world in the unitization of several straddling fields, that is, reservoirs that communicate through the hydrocarbon column.
– Eni and Vitol are in no way against evaluating the possibility for unitization, should sufficient and reliable subsurface data show that the Sankofa field and Springfield’s Afina discovery are straddling, in dynamic communication, and that unitization is warranted for the purposes of ensuring optimum recovery.
– To date, we have not received discovery data to ascertain whether the Afina discovery, drilled one year ago and never tested, and the Sankofa Cenomanian Oil field, which was discovered in 2012 and has been in production for about 3 and half years, are straddling the license border, are in dynamic communication, and whether unitization or any other form of coordinated development would be appropriate in accordance with Ghanaian law.
– To date, there has not been any appraisal of the Afina discovery that would establish commerciality of the Afina discovery and allow the parties to progress on the unitization process
– The study referred to in press reports as key in supporting the position of the Ministry of Energy neither demonstrates the existence of communication between Sankofa and Afina nor ascertains definitively that the discovered resources are producible.
– Eni and Vitol submit they are acting in full compliance with the Ghanaian law and remain open to exploring any potential unitisation that would optimise hydrocarbon recovery from the Sankofa field based on reliable data from both contract areas. Eni and Vitol look forward to a collaborative engagement on these issues in order to reach a consensual outcome reflecting applicable law, relevant project agreements and industry standards.
Springfield said in December that Afina has 1.5 billion barrels of oil in place. According to Eni’s website, Sankofa has reserves of about 40 billion cubic meters of natural gas and 500 million barrels of oil.
The process, known as unitization, distributes the resources between license holders in proportion to their share of the initial discoveries, allowing for more efficient development of the resources using shared infrastructure.
