Although many reasons have been espoused for the lack of new investments in Ghana’s upstream oil sector, the latest to be added is the long arbitration battle between energy giants Eni/Vitol and the Government of Ghana over whether the Sankofa oil field and Afina discovery should be developed together.
This is according to the CBOD 2024 Ghana Petroleum Industry Report cited by The High Street Journal.
The report confirms that no new petroleum agreements have been ratified since 2018, which is nearly eight years of silence in a once-fluid upstream market. CBOD says this is partly due to the fallout from the dispute over the unitisation of the Sankofa Field and the Afina discovery.
According to the report, the dispute damped investor sentiment, hence discouraging new investment, leading to the declining oil production.
What happened in the Sankofa–Afina dispute?
In 2020, Ghana’s then–Energy Ministry issued directives requiring Eni’s Sankofa field, a producing offshore asset and the nearby Afina discovery, a promising find by local company Springfield, to be unitised or merged.
Experts say unitisation is common in oil-rich basins when two reservoirs straddle adjacent licence areas.
Eni and its partner Vitol opposed this move, arguing that there was insufficient data to show the two fields were truly connected and that the unitisation order breached the terms of their petroleum agreement and Ghanaian law. They challenged it in Ghanaian courts and, after mixed results, took the matter to international arbitration under the UNCITRAL rules.
In July 2024, an international arbitral tribunal ruled largely in favour of Eni and Vitol, finding that Ghana’s unitisation directives were unlawful as implemented. The government subsequently withdrew its unitisation orders in early 2025 after reviewing the tribunal’s decision.
Investor Confidence Took a Hit
CBOD notes that the prolonged legal dispute signalled risk to potential investors. With licences tied up in litigation and uncertainty about how future resource development would be handled, companies have been hesitant to commit capital.
As a result, no new petroleum agreements have been signed since 2018, even as existing fields age and output declines.
“No new petroleum agreements have been ratified since 2018, with investor sentiment partly affected by the arbitration between Eni/Vitol and the Government of Ghana over the unitisation of the Sankofa Field and Afina discoveries,” the CBOD report indicated.
The Bottomline
The government has recently announced plans to increase investment in the upstream sector to avert the declining production.
However, some industry watchers say the sector urgently needs clear policy direction and a predictable legal environment if Ghana is to attract new players and capital back into upstream development.
