The Attorney General and Minister of Justice, Godfred Dame, has been accused of misleading the public regarding the outcome of an international arbitration 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 has led to reports that the government and GNPC won the case filed against them by Eni Ghana and the other plaintiffs.
In fact, Godfred Dame stated in the statement that the ruling represented a major victory for the government.
In the said statement, the Office of the Attorney General stated that the International Arbitration Tribunal has 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."
It indicated 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 was also dismissed, and that the tribunal affirmed Ghana's right or authority to unitize oil fields to achieve efficient exploitation of the deposits.
It added that the tribunal, however, 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.
But did the government truly win the case, or did it lose it?
A Vice President of IMANI Africa, Kofi Bentil, a private legal practitioner and a lecturer, has pointed out that anyone who says Ghana won the trial is not being truthful.
He pointed out that, according to the court ruling, 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!" he wrote in a post shared on X on Tuesday, July 9, 2024.
Kofi 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.
TWI NEWS
Read the full case brief below:
Eni Ghana Exploration and Production Limited & Vitol Upstream Ghana Limited v. The Republic of Ghana & Ghana National Petroleum Corporation (2024)
Case Summary
The dispute before this Arbitral Tribunal centres around what is known as "Unitisation". The parties dispute the precise contents and requirements of this process (see page 37 of the Award). Under Ghanaian law, section 34 of the Petroleum Act 2016 governs unitisation.
Section 34(1) provides:
"Where an accumulation of petroleum extends beyond the boundaries of one contract area into other areas, the Minister, in consultation with the Commission, may ensure optimum recovery of the petroleum from the accumulation of petroleum, direct the relevant contractors to agree to develop and produce the accumulation of petroleum as a single unit."
The Claimants, Eni Ghana Exploration and Production Limited & Vitol Upstream Ghana Limited, dispute the fact that the conditions for unitisation, as per international best practices, have not been met and fulfilled. The Respondents disagree.
Procedural & Historical Facts
• In 2018, Springfield delivered a proposal for 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, in May 2020, still contested the claims of Springfield, necessitating the directive for unitisation (see page 46 of the Award).
• In July 2020, Springfield brought an action in the High Court to compel Eni to comply with the directive made by the Minister.
• Eni expressed commitment to cooperate if Springfield withdrew the matter from court.
• Following the delayed compliance with the April directive, the Minister immediately 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.
Findings and Analysis:
• The Petroleum Commission's letter, on which the April directive relied, did not provide a basis for the Minister's conclusion that the Sankofa reservoir extended into the WCTP-2 Area.
• None of the sources provided by the Respondents established that there was a straddling accumulation, which could have triggered the order for unitisation.
• A reason for section 34 of the Petroleum Act 2016 shows that the invocation of unitisation is conditioned on the existence of a single reservoir in dynamic communication.
• There is no basis, per the evidence, that a single accumulation necessitates the order of unitisation.
Declarations and Awards:
• 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.
BAI/AE
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