10 Wells Enough For Ten First Oil

…As Côte d'Ivoire fails to Halt Next Project

…And Judge Mensah deflates Ivorian Claims

Watchers of Ghana's oil industry and players, waited with baited breadth as Justice Boualem BOUGUETAIA, President of the Special Chamber of the United Nations International Tribunal of the Law of the Sea (ITLOS), led his panel into the court room to deliver provisional orders.

Timeline: It was Saturday, April 25, 2015 and the time was 13:00hours GMT. The business of the day was to rule on a request for Provisional Orders sought by Côte d'Ivoire in a case titled: Dispute Concerning Delimitation of the Maritime Boundary between Ghana and Côte d'Ivoire in the Atlantic Ocean (Ghana/Côte d'Ivoire) and listed as Case No. 23.

At the end of the 23-page Provisional Orders, partners in Ghana's TEN project, located in the Deepwater Tano block, offshore Ghana heaved sighs of relief. The tribunal had rejected the Ivorian request for a halt of all activities in the disputed area, which hosts the Tweneboa-Enyera-Ntomme oil fields, dubbed TEN Field, leaving the project timeline for first oil unscathed.

This is because, “In the view of the Special Chamber, the suspension of ongoing activities conducted by Ghana in respect of which drilling has already taken place would entail the risk of considerable financial loss to Ghana and its concessionaires and could also pose a serious danger to the marine environment resulting, in particular, from the deterioration of equipment.”

The panel explained that “it considers that an order suspending all exploration or exploitation activities conducted by or on behalf of Ghana in the disputed area, including activities in respect of which drilling has already taken place, would cause prejudice to the rights claimed by Ghana and create an undue burden on it and that such an order could also cause harm to the marine environment,” the Order, which was made available on ITLOS' website stated.

The Special Chamber based its orders on Article 89, Paragraph 5, of the Rules, that empowers it to prescribe measures different in whole or in part from those requested by a party before it.

Tullow Oil, Operator of the TEN Field, had indicated in submissions to the court, among others, that it would not need to drill any new wells ahead of First Oil and the determination of the substantive case regarding the maritime boundary sometime in 2017.

Team Ghana, led by Attorney-General and Minister for Justice, Marietta Brew Appiah-Opong had tendered in evidence over 2,000 evidential documents, which included statutes signed by First Ivorian President, Félix Houphouët-Boigny, recognizing the maritime boundary co-ordinates they are currently disputing.

Tullow has completed the drilling of 10 initial wells which are all it requires for first oil production by the third quarter of 2016. The field, is expected to start producing from 24,000 barrels of oil per day (bopd) and ramp-up to nearly 80,000bopd in 2017 with the drilling of additional wells. A freeze on drilling of new wells in the disputed area, ordered by the tribunal, will therefore have little impact on this major project partners.

Côte d'Ivoire's prayer to the tribunal was for an Order for Ghana to “cease all exploration and exploitation activities in the disputed area.”

“Development work on the TEN Project continues. The project is now over 55 percent complete with all 10 of the wells expected to be online at first oil already drilled. The project remains within budget and on schedule with first oil expected in mid-2016,” Tullow said on its website soon after the tribunal decision.

Tullow added however that since it is not a party to the arbitration process, it would await a decision by the Government of Ghana on how it will implement the provisional measures.

“The Jubilee Field is completely unaffected by this arbitration,” it also stressed in the information.

Justice Mensah
For Justice Mensah, “Ghana has cogently argued that the activities of exploration and exploitation that it has undertaken or authorized in the disputed area “are not new”. Its argument is that, in line with a Decree issued by the then President of Cȏte d'Ivoire, Ghana has for a very long time (“more than four decades”) regarded the equidistance line as the border between Ghana and Cȏte d'Ivoire.

Judge Mensah, who was proffering a separate opinion of the case, however, agreed with the provisional orders of the tribunal:

“I agree with the provisional measures ordered by the Special Chamber. In these measures the Special Chamber orders Ghana to refrain from conducting new exploration or exploitation drilling in the disputed area. Such an order takes due account of the interests and rights of both parties.

He said this “seeks to protect the respective rights of both the applicant and of the respondent. In my view it recognizes that Ghana's activities in the disputed area are reasonable and takes on board Ghana's contention that these activities are legitimate, and have been carried out over a long period with the full knowledge, and acquiescence, of Cȏte d'Ivoire.”

[This Article was originally published in the Wednesday, 29^th April – Tuesday, 5^th May, 2015 print edition of The Business Analyst]