The Africa Centre for Energy Policy (ACEP) has explained that its positions on Springfield Afina drilling appraisal are not intended to harm Springfield but highlight issues of national interest, which have been undermined by recent governance failures.

According to ACEP, Springfield presented data that significantly differed from the data used by the government to determine Tract Participation (TP) percentages in the unitization directive.

ACEP is of the view that the directive gave Springfield and its partners 54.545 percent and Eni and its partners 45.455 percent.

“Notably, Springfield’s estimate of the Oil Water Contact at 3958m was about 172m less than the 4130m used by the Ministry of Energy to estimate a Stock Tank Oil Initially In Place (STOIIP) volume of about 642 million barrels”, statement from ACEP said.

It added that if the Oil Water Contact (OWC) provided in Springfield’s appraisal programme had been used from the outset, the Afina discovery would likely have been deemed to require further work to assess its commercial viability instead of the premature unitisation directive, which wasted the country’s time for three years.

Appraisal programme cost concerns

On cost concerns, ACEP recounted that the programme proposed re-entering the Afina well to assess reservoir productivity and potential pressure changes, at an estimated cost of $50 million.

The Civil Society Organisation is of the opinion that this raises concerns about value for money and the timing of the appraisal.

“Ideally, reservoir flow tests should have been conducted during the original drilling campaign when hydrocarbons were first encountered. Delaying the well test now increases costs for Ghana National Petroleum Corporation (GNPC) and Explorco, which are partners in the Afina field.

According to ACEP, tThis points to regulatory failures under the oversight of the Petroleum Commission and the Ministry of Energy, which have resulted in unnecessary financial burdens for Ghana.

“It is also highly contestable to pass-off the well re-entry proposed by Springfield as an appraisal programme within the context of Act 919 which requires delineation of the extent of hydrocarbon accumulation and the determination of commerciality of the discovery, which per industry practice is the essence of appraisal”.

Unitization objectives

ACEP pointed out that the appraisal programme aims to establish connectivity between the Afina and Sankofa fields, as required for the unitization process.

However, the statement said considering the arbitration ruling, ACEP believes that studies to confirm connectivity should have involved collaboration with the other party, Eni, to enhance the credibility of the process and avoid further disputes.

“A collaborative effort would have been more effective in addressing issues related to dynamic communication and commerciality, saving time and eliminating uncertainties”.

Additional concerns

ACEP expressed worry that there is a growing perception that hidden interests are being prioritized over investment and development in Ghana’s upstream sector.

It cautioned that as the world shifts away from oil and gas through decarbonization, ensuring a fair and transparent oil and gas industry in Ghana is more important now than ever.

“The recent focus on misgovernance, political interference, and regulatory failures threatens to erode the long-term potential of the sector, leaving the country vulnerable in an era of stranded assets. Addressing these challenges requires the government to adopt sound, transparent, and investor-friendly policies that align with global trends in energy transition and decarbonization”.

Springfield

Springfield Group debunked assertions by the Executive Director of the Africa Centre of Energy Policy (ACEP) Benjamin Boakye that Springfield’s recent appraisal of the Afina field contradicts original claims.

The response came on the back of statements made by Mr. Boakye in an interview on the sidelines of the ongoing October 2024 International Monetary Fund and World Bank Annual Meetings which suggested that Springfield’s new appraisal report contradicts the original data that was presented to justify the unitization.

Addressing the media on October 23, 2024, Springfield, led by its Chief Executive, Kevin Okyere explained that the company just started an appraisal programme, hence it has not yet ascertained the needed data which will constitute an appraisal report.

Mr. Okyere furthered that the claims by ACEP are false and should be disregarded.

“There has been recent reports in the media implying that Springfield has completed a recent appraisal of the Afina field and there is some new appraisal report that contradicts the original data that was presented to justify the unitization.”