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NewsAkufo-Addo has damaged Ghana's Oil and Gas industry - Kwakye Ofosu

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Akufo-Addo has damaged Ghana’s Oil and Gas industry – Kwakye Ofosu

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Government’s greed, corruption, and state capture, according to former deputy minister of information, Felix Kwakye Ofosu, have kept important investments out of the oil and gas industry.

He claimed that as a result, production is far below what the nation ought to be experiencing.

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He believes that our oil and gas sector has suffered greatly under the Akufo-Addo/Bawumia administration.

“Their corruption,greed and state capture have driven away vital investments from the sector leading to much lower production than we should be having.Not a single oil well has been put into production in the last 8 years. And we just lost a case against ENI,” he said in a post on his X platform reacting to the $915 million suit brought by Eni Ghana and Vitol Upstream against Ghana.

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On the other hand, the Minority advised the government to desist from making “unfortunate” and “immature” decisions that lead to legal action against Ghana.

The Final Award in the Eni & Vitol v. Ghana & GNPC arbitration has been released by the International Arbitration Tribunal.

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The government claims that the Tribunal refused to award the claimants their money damages. By the end of the proceedings, the claimants had revised their initial $7 billion claim to $915 million plus interest.

The entirety of the Claimants’ claims against GNPC were also rejected by the Tribunal.

The claimants also asked the Tribunal to rule that Ghana violated the Petroleum Agreement by “refusing to withdraw or prevent reliance by third parties on the Unitization Directives,” a request that was denied by the Tribunal.

The claimant’s request that Ghana inform the Supreme Court, Court of Appeal, and High Court of Ghana that the Unitization Directives were issued in violation of the Petroleum Agreement was also denied by the Tribunal.

The Tribunal, however, found that “in the circumstances in which they were issued,” the Unitisation Directives breached the Petroleum Agreement. That is, the unitisation was contrary to the applicable regulations and thereby breached Article 26(2) of the Petroleum Agreement. Nonetheless, the Tribunal affirmed Ghana’s right to the authority to unitise oil fields to achieve efficient exploitation of the deposits.

In regards to the division of fees and costs, the Tribunal determined that each Party would have to cover their own legal fees and costs because both had won in certain respects.

The Attorney-General and Minister of Justice, Godfred Yeboah Dame, responded to the Award by saying that, although he would have preferred that the Tribunal reject the Claimants’ claims against the Republic in their entirety, he is happy that the Tribunal rejected the claims against Ghana in part and the claims against GNPC in full.

He is also happy that Ghana will not be facing any major financial obligations as a result of the total rejection of all claims for monetary compensation made by ENI/Vitol against Ghana. Additionally, he is happy that the Tribunal upheld Ghana’s sovereign right to combine its oil fields.

The Attorney General went on to say that the Parties had to decide what course of action was best given the circumstances. In light of the Tribunal’s ruling, unitization is not illegal in general. In the present dispute, the Tribunal determined that the appropriate way and conditions for carrying out the same were not met.

According to the Attorney General’s Office, the government is still determined to vigorously oppose any international arbitration claims that aim to place the nation in debt.

This is demonstrated by recent wins over Beijing Everyway, Cassius Mining, and Messrs. Micheletti Company Limited.

But the Minority in a statement signed by John Abdulai Jinapor, Ranking Member of the Mines and Energy Committee, said that it has “noted with grave concern the false and distorted narrative put out by the Akufo-Addo/Bawumia Government through the office of the Attorney General to the effect that Ghana has won the legal case between the ENI/Vitol and the Republic of Ghana, represented by the National Oil Company (GNPC), at the International Court of Arbitration (ICA) in London. Such contrived narratives constitute gross misrepresentations and must be treated as such.”

The statement added that “With this statement, we call on the Government to refrain from such unfortunate and immature decisions in the future. We urgently call on the President to intervene and seek an amicable resolution to the impasse between Springfield and ENI to avert any further deterioration and losses in the country’s oil and gas sector.”

Read below the statement by the Minority

PRESS STATEMENT

For Immediate Release

9th July, 2024

STATEMENT ON ENI/VITOL VS GOVERNMENT FINAL RULING BY THE INTERNATIONAL COURT OF ARBITRATION

The Minority has noted with grave concern the false and distorted narrative put out by the Akufo-Addo/Bawumia Government through the office of the Attorney General to the effect that Ghana has won the legal case between the ENI/Vitol and the Republic of Ghana, represented by the National Oil Company (GNPC), at the International Court of Arbitration (ICA) in London. Such contrived narratives constitute gross misrepresentations and must be treated as such.

It will be recalled that ENI initiated a legal process against the Republic of Ghana at the International Court Of Arbitration following attempts by then Minister of Energy, Mr Peter Amewu, to impose a unitisation agreement on ENI’s Sankofa field in the Offshore Cape Three Points(OCTP) block and Springfield Energy’s Afina discovery in the West Cape Three Points 2 Block.

Contrary to the statement put out by the Attorney General’s office, the International Court of Arbitration, in its ruling, states explicitly in paragraph 489 of page 144 that:

i. The Republic of Ghana breached the Petroleum Agreement by issuing the Unitisation Directives in the circumstances in which they were issued;

ii. Declares that each Party shall bear its own costs;

iii. Orders the Republic of Ghana to pay to ENI Ghana Exploration and Production Limited and to Vitol Upstream Ghana Limited EUR189,900 for the costs of the Tribunal and SCC.

Given the above ruling, it is clear that the ICA rules against the Republic of Ghana, with the court affirming that the Government of Ghana’s directive on the unitisation was contrary to the applicable regulations and a clear breach of Article 26(2) of the Petroleum Agreement. With this ruling, therefore, the directive on unitisation by the Akuffo-Addo government stands null and void and has no effect.

It is unfortunate that despite the caution by the Minority in Parliament and other Civil Society Organisations to this NPP Government to hasten slowly on this particular issue, the Government was adamant. In the circumstances, all our genuine advice, as usual, fell on deaf ears and was ignored. We wish to state that we hold President Akuffo-Addo and his NPP Government directly responsible for this embarrassing spectacle, which only has the potential of further jeopardising the potential gains of Ghana’s upstream oil sector.

It is instructive to note that, despite inheriting three (3) oil fields from the Mahama administration, this NPP Government has added nothing significant to the oil sector; on the contrary, oil production has declined by about 32% under the current NPP administration.

Regrettably, most of the major oil-producing companies have either exited the country or slackened on their upstream activities because most investors currently view Ghana as a hostile and unfriendly business destination under this inept Akuffo-Addo/Bawumia government.

The Minority wishes to use this opportunity to acknowledge and commend Springfield (an indigenous Ghanaian Company) and ENI/Vitol for their significant investments in Ghana’s upstream oil sector. In the spirit of cooperation and ultimate benefit, we wish to encourage ENI/Vitol and Springfield to work towards finding common ground for a harmonious resolution of the impasse unnecessarily created by the Akuffo-Addo/Bawumia Government.

With this statement, we call on the Government to refrain from such unfortunate and immature decisions in the future. We urgently call on the President to intervene and seek an amicable resolution to the impasse between Springfield and ENI to avert any further deterioration and losses in the country’s oil and gas sector.

Thank you.

-SIGNED-
Hon. John Abdulai Jinapor–MP
(Ranking Member, Mines and Energy Committee)

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