Ghana hoping for new era in upstream by pushing for field unitization between Eni and Springfield

The government of West Africa’s Ghana is pushing for a fast-track development of a new oil discovery made by domestic operator Springfield E&P through a unitization agreement between Springfield and Eni as it came to light that the same reservoir straddles both Eni’s Sankofa field and Springfield’s Afina discovery.

According to Reuters, Ghana’s energy minister John-Peter Amewu in early April sent letters to Eni and Springfield saying that Eni’s Sankofa offshore field and Springfield’s Afina-1x field have the same reservoir and fluid properties.

Motivated by this discovery, the country’s government called for a unitization agreement between the two operators.

Reuters also reported that the letter instructed the companies to begin the process, which would lead to the unitization, within 30 days.

The government is requesting the operators to complete their unitization talks and deliver a draft of the agreement within four months, otherwise, the country’s minister of energy is empowered to stipulate the terms and conditions of such an agreement.

Looking to find out more about this potential agreement and operators’ thoughts on it, Offshore Energy has reached out to Eni and Springfield seeking confirmation about receiving the letters from Ghana’s minister.

Both Eni and Springfield have confirmed the receipt of the letter but stayed silent on details of their talks.

A spokesperson for Springfield also said: “We hope to engage positively with Eni in the coming weeks”.

Commenting on the unitization issue, a spokesperson for Eni said: “Eni is in contact with all the pertinent stakeholders in order to define a way forward to analyze and evaluate the matter”.

Commenting on Ghana’s efforts to unite the two offshore fields, the African Energy Chamber, an association representing the interests of African oil and gas industry, expressed its hopes that the talks would end in unitization agreement, ushering a new ear for Ghana’s upstream sector.

It also noted that this would be the very first unitization agreement between an international operator and a Ghanaian operator in the country.

The African Energy Chamber also underlined that such agreement would “ensure efficient reservoir exploitation, avoid unnecessary competitive drilling, and maximize economic recovery of the hydrocarbons reserves from both licenses”.

This push for unitization comes as the oil and gas industry is suffering heavy losses and is reluctant to invest in new projects.

Those approved before the current market crisis have already seen their costs slashed and unsanctioned projects have been pushed back for better days and Ghana is looking to reap the benefits by pushing for new development.

NJ Ayuk, Executive Chairman at the African Energy Chamber, said that Ghana’s proactive attitude towards the development of the country’s oil and gas sector and the push for the unitization agreement of Afina and Sankofa “is proof of political will that works to benefit the energy sector and the country”.

Ayuk added: “Fast-tracking the development of these fields is very positive given current market dynamics and ensures that a credible Ghanaian operator will start producing at a time when other players are shying away from investing in Africa’s upstream”.

It is also worth noting that the crown jewel of Ghana’s oil and gas sector, the Tullow Oil-operated Jubilee field, was unitized and approved for development in 2009.

The first oil from the field was achieved in December 2010 through the FPSO Kwame Nkrumah.

Springfield started drilling the Afina-1 well, located in the West Cape Three Points (WCTP) Block 2, offshore Ghana, in October 2019, using the Stena Forth drillship.

By mid-November, reports emerged that Springfield was about to reveal a huge discovery, perhaps even bigger than the Jubilee, Ghana’s biggest field until then.

Springfield completed the drilling campaign in late November but stayed silent on the discovery size.

Come December 2019 and Springfield finally broke the silence on its ‘significant oil discovery’ offshore Ghana.

The company said that the Afina-1, located at a water depth of 1030 metres was drilled to a total depth of 4085 metres and encountered light oil with a gross thickness of 65 metres, with 50 metres light net oil pay in good quality Cenomanian sandstones.

The secondary target in Turonian age sands was drilled at the edge of the structure and encountered 10 metres of hydrocarbon-bearing sands consisting of light oil and gas.

Springfield has more than doubled its discovered oil in place volume to 1.5 billion barrels and added 0.7tcf of gas. The current undiscovered potential of the Block is estimated at over 3 billion barrels of oil and gas in multiple leads and prospects within various proven reservoir units.

Springfield E&P is a majority interest holder (84 per cent) and operator of the WCTP2 License, with the Ghana National Petroleum Corporation and its exploration company, EXPLORCO, holding the remaining interest.

Eni’s Sankofa field is located in the Offshore Cape Three Points (OCTP) block, in Ghana. Eni formally started oil production from the field in May 2017.

The field was developed through wells and systems on the seabed, and linked through pipelines to the FPSO unit John Agyekum Kufuor.

Eni holds a 44.44 per cent interest, Vitol 35.56 per cent, and GNPC 20 per cent.

The OCTP Block is reported to have reserves of about 40 billion cubic meters of unassociated gas and 500 million barrels of oil.