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Springfield & Kevin Okyere’s 1.5-billion barrel oil well empty 

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The oil sector in Ghana, has been a focal point of controversy and debate for several years, especially with the emergence of Springfield Exploration and Production Limited (SGL) and its ambitious claims, regarding its oil discovery.

For the past five years, the company, has generated significant attention by announcing potentially vast oil reserves, initially estimating around 1.5 billion barrels of oil.

This figure was widely publicised and became a cornerstone of the company’s public narrative. However, key industry analysts and experts, including those from major firms like Wood Mackenzie and IHS Markit, have cast serious doubts on the commercial viability of the reserves.

The gap between Springfield’s optimistic announcements and the cautious outlook from the global oil intelligence community, has fueled skepticism about the true value of the discovery.

The reentry into the well, conducted by Springfield, has not yielded the expected results. Additionally, the oil encountered in the Cenamomeum play, which was expected to be one of the main targets of the appraisal, turned out to be lower than anticipated.

This has further compounded the growing doubts about the commerciality of Springfield’s claims. Continuous drilling beyond the existing strata has also encountered limited amounts of gas, further diminishing the prospects for a major discovery.

Despite these doubts, the Ghanaian government, has heavily relied on Springfield’s optimistic reserve estimates, using them as the foundation for a series of policies and legal actions that have severely impacted the country’s oil industry.

Central to this issue has been the government’s aggressive stance on unitization, particularly in relation to the Deepwater OCTP fields operated by Eni, a major player in Ghana’s oil sector.

The government, in its quest to ensure that Springfield’s discoveries were connected to existing oil fields, has pursued legal battles and regulatory measures that many industry experts, have described as poorly conceived and potentially damaging to the country’s long-term investment prospects.

The backdrop to this crisis is a dramatic shift in Ghana’s oil sector. For nearly four years, the promising oil industry that had once attracted major international oil companies turned into what some have described as a “graveyard” for investment. Prominent oil players, fearing the unpredictability of the regulatory environment, either withdrew from the country or drastically reduced their operations.

Exploration activities were curbed, and large-scale projects were delayed or abandoned entirely. The industry’s decline culminated in an international arbitration ruling in July 2024, which was a significant blow to the Ghanaian government. The arbitration tribunal ruled that Ghana’s handling of the unitization claims, particularly its attempts to force alignment with the OCTP fields, was incompetent.

The ruling left the Ghanaian government deeply embarrassed. In response, the government took the position that it had the general right to unitize the fields, citing the court’s recognition of unitization as a principle.

However, this response largely ignored the specific context of the case before the tribunal, which had ruled in favour of the OCTP partners. The government’s stance was seen by many as an attempt to save face after the embarrassing defeat, but it did little to address the underlying issues that had led to the arbitration in the first place.

Despite the court ruling, the Petroleum Commission, Ghana’s regulatory body for the oil sector, instructed Springfield to resume its appraisal program, which had been put on hold while the company pursued a courtroom declaration. This decision marked a significant development in the ongoing saga, with Springfield announcing a reentry into the 2029 oil well, as its appraisal program.

However, the manner in which this was handled has raised eyebrows across the oil industry. Experts have expressed serious concerns about the appropriateness of this approach, questioning whether the appraisal effort is being conducted with due diligence and in the best interest of Ghana’s oil sector.

One geophysicist, who spoke to The Herald on condition of anonymity, expressed strong reservations about the way the situation was being handled. “Recently, the cost of the reentry of the well at $50 million is exorbitant and does not optimize Ghana’s interest. That amount is enough to drill a whole new well.

A competent Petroleum Commission would be alert to transfer pricing and the procurement of services for the operation,” the geophysicist said. These remarks reflect growing unease within the industry about the financial structures surrounding Springfield’s operations and the potential for inefficient or inflated costs being passed on to the Ghanaian public.

Further investigations by The Herald into Springfield’s operations, uncovered troubling signs of potential transfer pricing. All service contracts associated with the current appraisal program have been sole-sourced to Fairfax, a subsidiary of Springfield.

Fairfax, in turn, is responsible for setting the prices of the services provided by international service companies involved in the project. This raises questions about the transparency and fairness of the pricing structures being used.

Given that Fairfax is a related party, it is possible that Springfield is inflating costs, a practice that could ultimately undermine the financial interests of Ghana.

The situation has created a sense of unease and frustration within the Ghanaian oil sector. As the appraisal programme continues, industry insiders are left questioning the legitimacy of the entire operation.

Some have even gone so far as to suggest that Ghana’s oil wealth is being mortgaged before actual production can even begin. There is a growing concern that the country is being taken advantage of, with oil reserves potentially being misrepresented to facilitate political agendas and business interests.

At the heart of this issue, is the question of what is actually happening on the ground with the reentry operations. Despite the fanfare surrounding the appraisal, there has been a conspicuous lack of clear communication from both Springfield and the government.

Industry insiders are reporting dead silence in the atmosphere, and some are even shocked by the outcomes of the operation so far.

Further report indicates that the Petroleum Commission, was denied the mandatory daily report on the operations.

There are reports that some politicians, who have invested heavily, their loot in the past eight years in the project are beginning to lose confidence after hearing the initial outcome of the appraisal, with one high-profile political figure even said to have lost focus in his bid to become Vice President of Ghana as a result of the disappointing developments.

According to sources familiar with the operation, the pressure at the well was found to be the same as it was in 2019, which suggests that the well may not be connected to a producing field, as previously hoped. “The pressure at the well is the same as it was in 2019, an indication that the well is not in dynamic communication with a producing field,” one source confirmed. This is a significant finding, as it undermines the central premise of Springfield’s oil discovery—that the well could be linked to the larger, commercially viable reservoir on the OCTP field.

“The worst of it is that the oil encountered in the Cenamomeum play is lower than expected,” the source added.

With these disappointing results, Springfield appears to be falling back on its old playbook of political maneuvering to achieve its objectives. There are reports of the company using political pressure to push for forced unitization of the fields, a strategy that has drawn sharp criticism from industry observers.

Senior managers from Springfield are said to have been tracking President Akufo-Addo on his travels to Azerbaijan and France, presumably to drum up political support for the company’s agenda.

Additionally, there are ongoing efforts to involve influential chiefs in the middle belt of Ghana to apply political pressure in favour of declaring the unitization of the fields.

These political efforts, could open up a new chapter of tension between the Ghanaian government and international investors. If forced unitization is pursued, it could trigger fresh legal battles and further discourage investment in Ghana’s oil sector. As The Herald sources report, “Springfield has regenerated its old model using politicians to get what they want, forced unitization of the fields,” which could spark another round of conflict in an already strained environment.

At this point, the future of Ghana’s oil industry hangs in the balance. The country’s ability to attract new investment, foster transparency, and ensure that its resources are managed effectively will depend largely on how the government and key players in the oil sector navigate these complex challenges.

If Ghana fails to address the structural issues that have plagued its oil industry, including the potential for transfer pricing, political interference, and a lack of clear communication with investors, the country may find itself trapped in a cycle of underperformance and lost opportunity.

As The Herald prepares to release further insights into the financial arrangements behind Springfield’s operations, the need for greater transparency and accountability in Ghana’s oil sector has never been more urgent.

If the country is to unlock the full potential of its oil resources, it will need to shift away from a model of political maneuvering and toward one of sound governance, technical expertise, and long-term investment strategies. Only then can Ghana truly capitalize on its oil wealth and ensure that it benefits the entire nation.

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