A dispute between Eni Ghana Exploration and Production Limited and Vitol Upstream Ghana Limited (“Claimants”), and the Republic of Ghana (“Ghana”) and Ghana National Petroleum Corporation (“GNPC” and, together with Ghana, “Respondents”) has recently concluded with an award finding that Ghana breached the underlying contract, but that no compensation is due to Claimants (SCC Case No. U2021/114).

The dispute stems from certain directives issued by Ghana’s Minister of Energy ordering the unitisation of Claimants’ Sankofa oil field with Afina, an adjacent oil discovery.  Unitisation is a process pursuant to which two or more adjacent fields are unified under a single concession, with the goal of extracting hydrocarbons efficiently. 

Claimants alleged that the directives were in breach of Ghanaian law, the underlying contract, and international best practice.  Claimants claimed more than US$ 900 million in damages.

A Tribunal formed by Prof. Gabrielle Kaufmann-Kohler, Ms. Judith Gill KC, and Prof. Mohamed Abdel Wahab found that Ghana’s unitisation directives did not comply with the applicable legal framework because the statutory trigger for commencing unitisation was not established, the imposition of unitisation terms presented certain procedural and substantive shortcomings, and the determination of the initial tract participation was arbitrary.

However, the Tribunal did not award any damages to Claimants.  The Tribunal considered that the directives had not been implemented and that certain unitisation terms, such as the tract participations, were not final.

The proceedings were held under the 1976 UNCITRAL rules and administered by the Stockholm Chamber of Commerce. Instructed by Respondents’ counsel, Foley Hoag LLP, Dr. Daniel Flores submitted three expert reports and testified at the hearing in Paris in August 2023.  Dr. Flores was assisted by a Quadrant team including Dario Gatti, Andrés León, and Francesco Benatti.