Abstract

Ghana's only indigenous upstream petroleum company engaged in petroleum operations, Springfield Ghana Limited, made the Afina-1 well discovery in its West Cape Three Points Block 2 in November 2019. It informed the Minister for Energy that the discovery was in the same reservoir of that of ENI and Vitol's producing Sankofa Field and requested for a unitization of the two fields. However, this was met with resistance from ENI and Vitol, which argued that the grounds for unitization had not been made out. Ghana, ordered the parties to enter into unitization, causing ENI and Vitol to bring the matter before the Stockholm Chamber of Commerce. A main theme playing out was a tension between a developing host country trying to achieve the objective of strategically positioning an indigenous company to be able to partake in the industry against that of an IOC operating with commercial objectives in mind and seeking clear justification for the actions of the host state. Whilst the Tribunal acknowledged Ghana's right to deal with its resources, it noted that this had to be done in accordance with its laws and regulatory procedures going a long way to dispel the notion that a host state can do as it pleases within its jurisdiction unfettered by any restraint, under the guise of the exercise of its sovereignty. Further, the decision unequivocally establishes the technical standard for unitization to occur.