Vitol/Eni Ghana Lawsuit: Minority Accuses Government of Spreading False and Distorted Stories

The Minority accuses the government of spreading a false and distorted story about the $915 million lawsuit filed against Ghana by Eni Ghana and Vitol Upstream.

On the positive side for Ghana, the Tribunal denied the claimants their compensation. The claimants initially claimed $7 billion, but they later revised this to $915 million plus interest at the end of the proceedings.

The Tribunal also dismissed the Claimants’ claims against GNPC in their entirety. In addition, the Tribunal dismissed the Claimants’ request that the Tribunal declare that Ghana breached the Petroleum Agreement by “refusing to revoke the Unitisation Directives or to prevent third parties from relying on the Unitisation Directives.” The Tribunal also dismissed the Claimants’ request that Ghana inform the High Court, Court of Appeal and Supreme Court of Ghana that the Unitisation Directives were issued in breach of the Petroleum Agreement.

However, the Tribunal found that “in the circumstances in which they were issued” the Unitisation Guidelines violated the Petroleum Agreement. That is, the unitisation was contrary to the applicable regulations and thus violated Article 26(2) of the Petroleum Agreement. Nevertheless, the Tribunal upheld Ghana’s right to the power to unitise oil fields in order to achieve efficient exploitation of the reserves.

With regard to the award of fees and costs, the Tribunal held that, since both parties had succeeded on certain points, each party should pay its own legal fees and costs.

The Attorney General’s Office says it remains committed to vigorously challenging all international arbitration claims against Ghana

In response to the ruling, Attorney General and Minister of Justice Godfred Yeboah Dame said he would have liked the Tribunal to dismiss the claimants’ claims against the Republic in their entirety. However, he is pleased to note that the Tribunal has dismissed the claims against Ghana in part and the claims against GNPC in full.

He also welcomes the complete dismissal of all claims for financial compensation by ENI/Vitol against Ghana, sparing Ghana a significant financial liability. He also welcomes the Tribunal’s affirmation of Ghana’s sovereign right to pool its oil fields.

The Attorney General added that the parties must determine the best way forward in the circumstances. Unitization is not unlawful in principle according to the Tribunal’s decision. It is the manner and circumstances in which the same should be carried out that the Tribunal found wanting in the present dispute.

The Public Prosecution Service says it is determined to vigorously oppose all international arbitration claims aimed at imposing debt on the country.

Recent victories over Beijing Everyway, Cassius Mining and Messrs Micheletti Company Limited are evidence of this.

But the Minority said in a statement signed by John Abdulai Jinapor, Ranking Member of the Mines and Energy Committee, that it “has noted with great concern the false and distorted narrative being disseminated by the Akufo-Addo/Bawumia government through the office of the Attorney General to the effect that Ghana has won the court case between ENI/Vitol and the Republic of Ghana represented by the National Oil Company (GNPC) at the International Court of Arbitration (ICA) in London. Such fabricated narratives constitute gross misrepresentations and should 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 urge the President to intervene and seek an amicable solution to the impasse between Springfield and ENI to prevent further deterioration and losses in the country’s oil and gas sector.”

Read the Minority’s statement below

PRESS STATEMENT

For immediate release

July 9, 2024

DECLARATION ON ENI/VITOL VS. FINAL JUDGMENT OF THE INTERNATIONAL COURT OF ARBITRATION ON THE ENI/VITOL VS.

The Minority has noted with great concern the false and distorted story that the Akufo-Addo/Bawumia government has been spreading through the Attorney General’s office, resulting in Ghana winning the case between ENI/Vitol and the Republic of Ghana represented by the National Oil Company (GNPC) at the International Court of Arbitration (ICA) in London. Such fabricated stories constitute gross misrepresentations and should be treated as such.

You will recall that ENI initiated legal proceedings against the Republic of Ghana at the International Court of Arbitration after the then Minister of Energy, Mr. Peter Amewu, attempted to impose a unitary 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 of the Attorney General’s Office, the International Court of Arbitration explicitly states in its ruling in paragraph 489 of page 144 the following:

i. The Republic of Ghana has breached the Petroleum Agreement by issuing the Unitisation Guidelines in the circumstances under 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 the sum of EUR 189,900 towards the costs of the Tribunal and SCC.

In view of the above judgment, it is clear that the ICA finds against the Republic of Ghana, with the court confirming that the directive of the Government of Ghana on unitisation was contrary to the applicable regulations and a clear violation of Article 26(2) of the Petroleum Agreement. With this judgment, the directive on unitisation by the Akuffo-Addo government is therefore null and void and of no effect.

It is unfortunate that despite the warning from the minority in parliament and other civil society organisations to this NPP government to go slow on this particular issue, the government was adamant. Under these circumstances, all our sincere 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 shameful spectacle, which only has the potential to further jeopardise the potential profits of Ghana’s upstream oil sector.

It is instructive to note that despite inheriting three (3) oil fields from the Mahama government, this NPP government has not added anything of substance to the oil sector; on the contrary, oil production has declined by about 32% under the present NPP government.

Unfortunately, most major oil producing companies have either withdrawn from the country or have ceased their upstream activities, as most investors see Ghana as a hostile and unfriendly business destination under the clumsy Akuffo-Addo/Bawumia government.

The Minority wishes to take this opportunity to recognize 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 needlessly 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 urge the President to intervene and seek an amicable solution to the impasse between Springfield and ENI to prevent further deterioration and losses in the country’s oil and gas sector.

Thank you.

-SIGNED-
Honourable John Abdulai Jinapor – Member of Parliament
(Ranking Member, Mines and Energy Commission)