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Ghana directs Eni to combine oil deposit with local explorer

Highlights
  • Eni is opposing joint operation with neighboring driller
  • The two companies have 120 days to submit draft agreement

Ghana’s government directed Eni SpA to start talks on combining its deposit at an offshore field with a neighboring explorer, according to a letter seen by Bloomberg.

The Italian major, which operates the Sankofa Oil and Gas fields in a venture with Vitol Holding BV, has 120 days to conclude a draft so-called unitization and operating agreement with Springfield Exploration and Production Ltd., Minister of Energy John-Peter Amewu wrote in a letter dated April 9. Eni is opposing such a move on the basis that Springfield hasn’t sufficiently tested its discovery to show that it shares a reservoir with the Sankofa field, said Amewu.

Recent drilling on the Springfield block showed that its deposit has properties that are identical to the Sankofa reservoir, providing “further evidence that the two reservoirs are one and the same,” said Amewu. Springfield, owned by local investors, reported in December that the field has 1.5 billion barrels of oil reserves.

Spokespeople for the energy ministry and Eni confirmed the correspondence while declining to comment further. A spokesman for Springfield didn’t answer calls.

Unitization agreements are typical for parties to jointly operate an oil and gas reservoir. The ramping up of output at energy assets by operators such as Eni and Tullow Oil Plc have helped Ghana to achieve economic expansion of more than 6% over the past three years.

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