In an interesting turn of events, the government has officially ordered the withdrawal of the controversial unitization directive issued by the previous administration which forcefully compelled Eni Ghana Exploration and Production Limited and Springfield Exploration and Production Limited to merge operations at the Afina 1X Discovery and Sankofa Cenomanian Oil Field.
This new policy direction issued by the government through the Ministry of Energy and Green Transition follows a detailed review of an arbitration ruling in the case of Eni & Vitol v. Ghana & GNPC.
A letter issuing the new government’s directive cited by The High Street Journal also indicated that the government, apart from the review of the arbitration ruling delivered in July 2024, also sought legal advice from the Attorney General.
The Ministry indicates that as of the reasons for the reversal of the previous government’s directive, the tribunal found serious procedural flaws in the actions of the former administration.
Energy Minister, John Abdulai Jinapor, in the latter stated that the earlier directive by the former government lacked statutory basis in addition to an arbitrary allocation of participation interests.
“I write to formally communicate the decision of the Ministry of Energy and Green Transition to withdraw the Unitization Directives,” parts of the letter read.
The letter further stated that, “The Ministry acknowledges the Tribunal’s findings that while the issuance of the Directives breached he Petroleum Agreement due to the specific circumstances of their implementation, the concept of unitization itself was not deem inherently unlawful.”
Given the discretionary powers of the Minister as granted by law, although the previous the directives have been withdrawn, John Jinapor maintained that a new directive could be issued if any new evidence are found that makes the unitization necessary.
Such new directives, the Minister emphasized will only be issued in the interest of equitable and efficient development of Ghana’s petroleum resources.
The government further reiterated it commitment to maintaining a conducive a environment for investment in the upstream petroleum sector. However, such directive will only be issued in full compliance of the law.
