Multi-Million Judgment Debt Awaits Ghana, As ENI sues in London

Ghana is set for a potential Judgment debt running into some US$ 200 million as Italian oil giant, ENI SPA sues the government at the International Arbitration Tribunal in London.

Eni is challenging a breach of contract by the Government of Ghana (GoG) on its Sankofa oil field with that of Springfield’s Afina oil field. The government is reported to be “unlawfully” forcing ENI to two oil fields in what the Italian company regards as a breach of contract.

A lawsuit was filed Tuesday on behalf of the firm by three renowned lawyers – Craig Tevendale, Andrew Cannon and Charlie Morgan from Herbert Smith Freehills LLP

 Eni is seeking five reliefs from the Tribunal including a declaration that the purported directives by the then Energy Minister, John Peter Amewu, and any other steps taken to implement those directives represent a breach of contract under the Petroleum Agreement (PA).

It also wants a declaration that the respondents take no further action to implement the purported unitization of the Sankofa Field and Afina discovery on the terms of the purported directive.

The claimant is also seeking an order that the respondent pays damages in an amount to be quantified for the losses suffered by ENI arising out of the respondent’s breaches of the petroleum agreement, Ghanaian law and International law on a joint and several bases.

Additionally, ENI is seeking an order that the respondent pays all of the costs and expenses of the arbitration including the fees and expenses of the claimant counsel and any witnesses and/or experts in the Arbitration, the fees and expenses of the Tribunal and the fees of the SCC on a joint and several bases and /or order such further or other relief as the tribunal may in its discretion consider appropriate.

In April 2020, then Minister for Energy, John Peter Amewu, issued a directive to Eni and Springfield E&P to begin talks and combine their adjacent oil and gas fields and gave them until September 18 to reach an agreement.

The Minister’s directive said that seismic data had indicated Eni’s Sankofa offshore field, which entered production in 2017, and Springfield’s Afina Discovery had identical reservoir and fluid properties.

But more than a year after the directive, both Eni and Springfield E&P have refused to combine their oil fields. 

ENI’s suit comes on the back of an earlier ruling by a Commercial High Court in Accra, Ghana on Friday, June 25, 2021, in favour of Springfield, an upstream firm wholly owned by a Ghanaian.

The High Court (Commercial Division) had among others ordered that Eni Ghana relinquish 30 percent of revenues accrued from the sale of crude oil from the Sankofa field and make monthly payments of approximately $40 million into an account agreed upon by both companies.