Indigenous Ghanaian oil company Springfield Group says it hopes to “engage positively” with oil major Eni in the coming weeks to combine their adjacent oil and gas fields, a company spokeswoman said Monday.
Ghana’s ministry of energy recently directed Eni and Springfield to start negotiating a unitization agreement to develop the reservoir that straddles both of their blocks.
This order comes in the midst of a severe oil price crash, which is prompting many oil companies to review, delay or cancel a slew of upstream projects.
National interest
In a letter addressed to the companies, energy minister John-Peter Amewu said there was technical evidence that the Afina and Sankofa fields have “identical reservoir and fluid properties”.
Amewu, explained that this agreement would “ensure efficient production of the reservoir; maximise economic recovery of petroleum from the two contract areas; avoid unnecessary competitive drilling which might destroy the reservoir, and therefore is in the national interest.”
The government asked the companies to begin talks within 30 days [of the letter dated April 9] to lead to complete unitization or joint operation of the fields. It has given Eni and Springfield 120 days to provide a draft deal.
If the two parties fail to comply with this order, the minister can enforce the agreement as per Regulation 50(6) of L.I. 2359, the letter said.
A representative at Eni was unavailable for comment.
Eni had previously argued against this policy as the Afina field had yet to appraised and tested.
Eni operates the offshore Cape Three Points block, which is estimated to have reserves of about 40 Bcm of unassociated gas and 500 million barrels of oil. It contains the Sankofa offshore field, which has been producing since 2017.
Springfield discovered oil at the Afina field in the West Cape Three Points Block 2 late last year, and doubled its in place resources to around 1.5 billion barrels of oil and adding 0.7 Tcf of gas. This was the first find by an indigenous player in the country.
Economic sense
Analysts said such an agreement could make this development even more cost-competitive especially at a time of low oil prices, as most oil companies start to drastically cut their capital expenditure for such projects.
Such a deal would ensure “efficient reservoir exploitation, avoid unnecessary competitive drilling and maximize economic recovery,” according to a note by the consultancy Africa Energy Chamber.
A similar unitization agreement was agreed between Tullow Oil and Kosmos Energy in 2010 that led to the development of Ghana’s first oil field Jubilee.
Unlike some of its neighbours, Ghana has come relatively late to the oil industry and only began commercial crude production at the Jubilee field in 2010. Ghana produces about 160,000 b/d of oil, mainly from the Jubilee, TEN and Sankofa fields.
Founded as a domestic fuel distribution, trading and export company by in 2008, Springfield branched out into oilfield services in 2011 and expanded into upstream operations in 2016 when it was awarded operatorship of the WCTP Block 2.
Source: spglobal.com
