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Ghana didn’t win ENI-Vitol case, it escaped – Kofi Bentil

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The Attorney General and Minister of Justice, Godfred Dame, has been accused of misleading the public regarding the outcome of an international arbitration case filed against the government of Ghana and the Ghana National Petroleum Corporation (GNPC) by Eni Ghana Exploration and Production Limited and Vitol Upstream Ghana Limited.

A statement by the Office of the Attorney General on the arbitration led to reports that the government and GNPC won the case filed against them by Eni Ghana and the other plaintiffs. Godfred Dame stated that the ruling represented a major victory for the government.

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In the statement, the Office of the Attorney General claimed that the International Arbitration Tribunal had dismissed all claims for damages and compensation in a suit filed against the government of Ghana and GNPC.

The statement indicated that the ruling on July 8, 2024, dismissed the claimants’ request to declare that Ghana breached a petroleum agreement by “refusing to withdraw or prevent reliance by third parties on the Unitisation Directives.”

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It also dismissed the claimants’ request for Ghana to notify the High Court, Court of Appeal, and Supreme Court of Ghana that the Unitisation Directives were issued in breach of the Petroleum Agreement. The tribunal affirmed Ghana’s right or authority to unitize oil fields to achieve efficient exploitation of the deposits.

However, the tribunal found that the Unitisation Directives, “in the circumstances in which they were issued,” breached the Petroleum Agreement and that the specific Unitisation Directives were contrary to the applicable regulations, thereby breaching Article 26(2) of the Petroleum Agreement.

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Contrary to the Attorney General’s statement, Vice President of IMANI Africa, Kofi Bentil, a private legal practitioner and lecturer, pointed out that anyone claiming Ghana won the trial was not being truthful. According to Bentil, the court ruling showed that Eni Ghana and the other claimants won the case because their main relief was granted by the court.

“By Court… the ruling is as follows: 1. The merger was unlawful and wrong, so ENI should not join or merge with any company. Ghana’s orders were wrong, period! 2. ENI has not proven that it lost a billion dollars, so they won’t be given any damages. 3. Each party should go and pay their lawyers. The two parties should share and pay the court fees.

“If anyone tells you Ghana won, they are simply saying Ghana lost but avoided the payment of damages. It’s NOT a win; it is an escape!” Bentil wrote in a post shared on X on Tuesday, July 9, 2024.

Bentil added, “If they tell you ENI won. Indeed, they also escaped the forced merger, but to the extent that they got the main relief they sought, they won! Even if they didn’t get damages and they have to pay their own lawyers!! ENI won!!!”

Case Brief

A case brief from the arbitration shared by ghlawtrends.com also pointed out that the tribunal ruled that Ghana’s Minister of Energy was wrong in directing Springfield & Eni to begin a process of Unitisation of the Afina & Sankofa fields, which was the main relief sought by the claimants. The tribunal did not grant the damages sought by the claimant because, in its view, no substantial damage was caused.

“The tribunal concludes that the Minister of Energy did not fulfil the precondition of finding the existence of a single accumulation within the meaning of section 34 before ordering the initiation.

“The order of unitisation is premature. The imposition of unitisation terms is wrongful. It is improper for the Minister to decide tract participation solely based on the GNPC report without calling for any independent analysis.

“The claim of loss by the Claimants caused by the breaches of the Respondents is unsubstantiated, and the same is dismissed. Counterclaims by the Respondent are unfounded and are dismissed. The Republic of Ghana is ordered to pay 189,000 euros to the Claimants,” parts of the case brief read.

Summary of the Case

The dispute before this Arbitral Tribunal centered around “Unitisation.” The parties disputed the precise contents and requirements of this process under Ghanaian law, specifically section 34 of the Petroleum Act 2016.

Procedural & Historical Facts:

  • In 2018, Springfield delivered a proposal for the unitisation of the Sankofa East Oil Field & Sankofa Main Gas Field to the Minister of Energy.
  • Springfield presented its case to the Minister, and Eni was invited to do the same.
  • Eni contested the claim, arguing that there was no evidence that the Sankofa field had extended into the block operated by Springfield.
  • In April 2020, after several engagements, the Minister directed Springfield & Eni to begin a process of Unitisation of the Afina & Sankofa fields within 30 days.
  • Eni contested the claims of Springfield, necessitating the directive for unitisation.
  • In July 2020, Springfield brought an action in the High Court to compel Eni to comply with the directive made by the Minister.
  • Following the delayed compliance with the April directive, the Minister reissued a directive for unitisation in October 2020.
  • Eni contested the October directive and requested time, but the Minister informed Eni that the October directive was effective and non-negotiable.
  • In 2021, the Claimants (Eni & Vitol) wrote to the President of Ghana expressing commitment to unitisation only if the process was fair and transparent.
  • In 2021, the High Court granted an order prayed for by Springfield for the preservation of 30% of revenues from the operation of the Sankofa fields by the Claimants.
  • The Claimants also instituted a judicial review process to set aside the orders and directives of the Energy Minister. The High Court dismissed the application, and the Claimants filed an appeal with the Court of Appeal.

The tribunal concluded that the Minister of Energy did not fulfill the precondition of finding the existence of a single accumulation within the meaning of section 34 before ordering the initiation, making the order of unitisation premature and wrongful. The claim of loss by the Claimants was unsubstantiated and dismissed, as were the counterclaims by the Respondent.

Ultimately, the tribunal ordered the Republic of Ghana to pay 189,000 euros to the Claimants.

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