Escrow account: Supreme Court dismisses Eni, Vitol application

The Supreme Court has on Tuesday (16 November) dismissed Eni and Vitol’s application for special leave to appeal the Court of Appeal’s affirmation of the High Court’s ruling on the deposit of 30% of the revenue from the sale of crude oil from the Sankofa field into an escrow account.

The ruling by the apex court means Eni and Vitol have no option but to comply with the High Court ruling and retrospectively pay the 30% from 25 June 2021 into the bank account.

A commercial court in Accra on Friday (25 June 2021) ruled that 30% of revenue from an ENI-operated oilfield be placed in an escrow account. Springfield, which operates the Afina oilfield neighbouring ENI’s Sankofa field, had asked the court to preserve revenue from Sankofa until a deal is reached and each company gets a share.

The court said its decision would protect the interests of Springfield while allowing Sankofa, which produces over 50,000 barrels of oil per day, to continue operating and cover costs.

Reserve oilfield estimates

Oilfields that straddle each other are required under Ghanaian law to combine operations in order to reduce production costs.

But Eni and its partner Vitol have argued that there is no basis for Springfield’s Afina discovery to be considered commercially productive, and that an order last year from the Ministry of Energy to combine the oilfields was premature.

The partners will file their defence in that case in ten days, the court ordered.

Sankofa, which has been producing oil since 2017, is part of ENI’s Offshore Cape Three Points project off the Atlantic coast.

Eni says the project has reserves of roughly 500 million barrels of oil and 40 billion cubic metres of unassociated gas.

Springfield says Afina, discovered in 2019, holds 1.5 billion barrels of oil and approximately 19.8 billion cubic metres of gas.

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