ACEP Condemns Springfield’s Afina-1x Appraisal and Flags Failures in Ghana’s Oil Sector
The Africa Centre for Energy Policy (ACEP) has raised serious concerns about governance issues in Ghana’s upstream petroleum sector, particularly in relation to Springfield’s Afina-1x appraisal programme.
ACEP pointed to regulatory failures and poor decision-making, warning that these shortcomings could undermine the long-term potential of Ghana’s oil industry.
In a press statement on Thursday, October 24, 2024, Mr Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP noted the decline in Ghana’s oil production and the failure of government policies to attract exploration investments.
He attributed part of the country’s fiscal struggles to overly optimistic oil revenue projections, which have not materialized.
“The Ministry of Finance has consistently projected high oil production levels to support borrowing and financial commitments. However, these forecasts were overly optimistic, and the reality has been a significant downturn in both production and investment,” he said.
ACEP also addressed the ongoing dispute between Springfield and Eni over the Afina discovery and Sankofa field, highlighting inconsistencies in data used for determining Tract Participation (TP) percentages. The think tank criticized Springfield’s appraisal programme, noting discrepancies in the Oil Water Contact (OWC) estimate, which differed from the Ministry of Energy’s data.
“If the right data had been used from the start, the commercial viability of Afina would have required further assessment, potentially avoiding the waste of three years in the unitization process,” the ACEP director explained.
The think tank also questioned why reservoir flow tests weren’t conducted during the initial drilling campaign, which has now resulted in a costly $50 million re-entry into the Afina well to assess productivity. ACEP called this a failure in regulatory oversight, which has placed an unnecessary financial burden on the Ghana National Petroleum Corporation (GNPC) and its partners.
Additionally, ACEP expressed disappointment over the lack of collaboration between Springfield and Eni in the appraisal programme, calling it a missed opportunity for a joint effort to establish connectivity between the Afina and Sankofa fields.
“Instead of litigating investors, the government should have focused on sound scientific approaches to resolve technical issues. A joint study with Eni would have improved the credibility of the unitization process and saved time,” the Executive Director noted.
Kodzo Yaotse, Policy Lead for Petroleum & Conventional Energy at ACEP, urged the government to adopt transparent and investor-friendly policies, especially in light of global energy transition trends.
“As the world moves towards decarbonization, it is critical for Ghana to ensure that its oil and gas industry is transparent and governed by sound policies. Misgovernance, political interference, and regulatory failures threaten to erode the long-term potential of the sector, leaving Ghana vulnerable in a world of stranded assets,” Yaotse warned.
Source:Felix Nyaaba//expresnewsghana.com
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