Since its first commercial oil production in 2010, Ghana has been eager to develop its hydrocarbon potentials. However, a recent injunction from an international tribunal, forbidding the West African country from drilling in disputed waters with Ivory Coast, may prove a stumbling block in this quest.
Though Ghana was barred from exploring new fields, the tribunal held back from grounding current oilfield operations saying it would culminate in “considerable financial loss” to the gold coast. Ivory Coast had initially requested that all drilling be suspended because the water constitute the maritime border between both West African countries. The area is believed to hold the biggest hydrocarbon resources in the region, and is expected to spark a diplomatic row between both countries as they bid to exploit the untapped asset.
Specifically, the tribunal instructed Ghana to “take all necessary steps to ensure than no new drilling either by Ghana or under its control takes place in the disputed area” and to “refrain from granting any new permit for oil exploration and exploitation in the disputed area.”
Ghana’s current activities include the Tweneboa, Enyenra and Ntomme (TEN) project, expected to commence commercial production of upto 80,000 barrels per day in the second half of 2016. Although the facilitating equipment are yet to be installed, ten (10) wells have been drilled, and will be unaffected by the recent embargo. “Our interpretation of the ruling is such that we believe that there had been no impediment presented to the continuation of those activities,” noted Kenneth Keag, Vice-President and Country Manager of Kosmos Energy, a major partner in the development of the fields.
Both countries are to present further evidence and arguments next month during the next stage of the resolution, which many believe could last till 2017.
Ghana and Ivory Coast are West Africa’s second and third largest economies respectively, and while they both produce cocoa, Ivory Coast is undoubtedly the world’s largest cocoa producer. As both countries look to boost their existing offshore oil production, this lawsuit could indicate a change in relations between them.
By Emmanuel Iruobe