A prolonged legal dispute between energy giants Eni and Vitol and the Government of Ghana over oil field development contributed significantly to dampening investor confidence in the country’s upstream petroleum sector. The Ghana Chamber of Bulk Oil Distributors (CBOD) confirmed in its 2024 Petroleum Industry Report that no new petroleum agreements have been ratified since 2018, an eight year drought partly attributed to the Sankofa-Afina unitisation controversy.
According to the report released January 6, 2026, the arbitration battle signaled substantial risk to potential investors, making companies hesitant to commit capital while licences remained tied up in litigation. The dispute centered on a 2020 directive from Ghana’s then Energy Ministry requiring Eni’s producing Sankofa field and Springfield’s nearby Afina discovery to be merged or unitised, a common practice when reservoirs straddle adjacent licence areas.
Eni and partner Vitol opposed the move, arguing insufficient data demonstrated the fields were genuinely connected. The companies contended that the unitisation order breached their petroleum agreement terms and Ghanaian law. After mixed results in domestic courts, they escalated the matter to international arbitration under United Nations Commission on International Trade Law (UNCITRAL) rules through the Arbitration Institute of the Stockholm Chamber of Commerce.
An international arbitral tribunal ruled largely in favor of Eni and Vitol in July 2024, finding that Ghana’s unitisation directives were unlawfully implemented. The tribunal determined that Ghana breached its laws and the Offshore Cape Three Points (OCTP) Petroleum Agreement by issuing the directive in circumstances inconsistent with applicable regulations. However, the panel affirmed Ghana’s broader authority to unitise oil fields for efficient exploitation when proper procedures are followed.
The tribunal dismissed entirely the claimants’ monetary damage claims, which initially sought seven billion dollars before being revised to 915 million dollars plus interest. The panel also dismissed all claims against Ghana National Petroleum Corporation (GNPC), while preserving Eni and Vitol’s right to claim damages if unitisation directives were enforced in the future. The government subsequently withdrew its unitisation orders in early 2025 after reviewing the tribunal’s decision.
CBOD noted in its report that investor sentiment suffered substantially throughout the arbitration period. With uncertainty about how future resource development would be handled and key assets locked in legal proceedings, international oil companies adopted a cautious stance toward new commitments in Ghana. The hesitancy contributed to production declines as existing fields aged without fresh investments to offset natural depletion.
The 2024 Petroleum Industry Report documented total crude oil production of 48.24 million barrels, indicating a slight decrease from 2023 and approximately 32.5 percent less than 2019 levels. Despite lower production volumes, government revenue from upstream petroleum increased significantly to 1.36 billion dollars, representing a 28.3 percent rise over 2023 and the second highest annual petroleum receipts since commercial production began. The revenue increase resulted from favorable oil prices and improved operational efficiency at producing fields.
Ghana’s upstream sector has remained below pre COVID production levels, with the investment drought manifesting in stalled field developments. The competitive bidding round conducted in 2019, which awarded Block 3 to Eni Ghana, failed to yield signed petroleum agreements partly due to an unattractive and hostile investment climate perceived by international operators. No additional oil and gas fields have been developed since 2017 when Sankofa commenced commercial production.
The General Transport, Petroleum and Chemical Workers Union expressed concerns in August 2024 about the dispute’s impact on employment and the broader investment climate. The union petition to the Energy Minister noted that failure to resolve the matter had significantly affected the OCTP project investment environment, resulting in potential job losses for members. Union officials suspected foul play given the government’s seeming disinterest in executing the final arbitration award.
Industry analysts have questioned why the previous administration pursued the unitisation directive so aggressively despite evidence suggesting potential losses for both Ghana and producing partners. Critics argued that the only clear beneficiary would have been the Afina discovery owner, raising unanswered questions about the government’s willingness to pursue actions apparently contrary to national economic interests and international reputation.
The Sankofa field, operated by Eni and Vitol, serves as Ghana’s major gas supplier for power plants while generating significant revenues from the state’s equity stake. Ghana had issued sovereign guarantees and tapped World Bank guarantee facilities to make the project operational. Forcing the lucrative producing asset into merger with an unproven greenfield block would have caused massive disruption, undermined commercial viability and potentially triggered gas supply cuts that could have plunged Ghana into power crisis.
Energy Minister John Abdulai Jinapor withdrew the controversial unitisation directive in late January 2025 after conducting thorough reviews consulting the Petroleum Commission and legal experts. The decision followed comprehensive analysis of the arbitral award and consideration of industry stakeholder concerns about investment climate deterioration. The ministry acknowledged the tribunal’s findings while affirming Ghana’s continued legal authority to pursue unitisation when proper procedures and technical justifications exist.
The CBOD report concluded with policy recommendations including increased foreign exchange allocations to bulk importers, measures to stabilize the cedi, removal of burdensome taxes on liquefied petroleum gas and promotion of petroleum product exports. The chamber emphasized that clear policy direction and predictable legal environments remain essential if Ghana hopes to attract new players and capital back into upstream development.
Ghana faces urgent need to reverse production declines threatening fiscal stability. The government recently announced plans to increase upstream sector investment, with Finance Minister Dr. Cassiel Ato Forson stating in the 2026 Budget that ongoing investor focused reforms have unlocked more than 3.5 billion dollars in new commitments. Ghana National Petroleum Corporation plans to begin drilling in the offshore Volta Basin in October 2026, opening new frontiers for domestic production.
However, timing remains challenging as global crude oil prices have slumped to multi year lows, complicating investment attraction efforts. Crude fell to approximately 56 dollars per barrel in early January 2026, extending a steady slide from 78 dollars per barrel a year earlier. Low prices reduce appeal of investing in new wells, especially in countries where costs are higher or regulatory frameworks remain unclear following extended legal disputes.
David Ampofo, chief executive of the Ghana Upstream Petroleum Chamber, previously identified lack of investment as the main driver behind production declines. While Ghana holds about 14 petroleum agreements, only two are actively producing. Several high profile exploration wells have yielded no discoveries, dampening investor enthusiasm and leaving licensing rounds with fewer bids than anticipated.
The resolution of the Sankofa-Afina dispute represents a necessary first step toward restoring investor confidence. However, industry observers emphasize that Ghana must demonstrate consistent respect for contractual agreements, maintain predictable regulatory environments and offer competitive fiscal terms to successfully compete for global oil investment capital in an increasingly challenging price environment.
