ENI vs Springfield Exploration (Inside story)

Aug 15, 2024 - 01:03

U.S. District Judge Keith P. Ellison has imposed fees and costs sanctions against Ghanaian company Springfield Exploration & Production Ltd. in response to allegations made by Italian oil giant Eni's Ghanaian unit, Eni Ghana Exploration & Production Ltd., alleging that Springfield misrepresented the nature of the related Texas dispute to the Ghanaian court.

BACKGROUND

Eni Ghana initiated the Texas proceedings to obtain the production of a report prepared by Gaffney Cline & Associates Inc., which purportedly found that a Springfield oil field in Ghana had a large untapped reserve, proving the commercial viability of a joint venture that would unite two fields owned by Springfield and Eni Ghana, respectively, Judge Ellison said.

The original respondents in Eni Ghana's Texas actions were Gaffney Cline and its parent business, the British oil services company Baker Hughes Co. Springfield later intervened. Judge Ellison approved Eni Ghana's petition to produce the report in August 2022.

"However, Springfield refused to release the Gaffney Cline report or the data on which the study based its conclusions, prohibiting Eni Ghana fromc hallenging Springfield's assertions," the judge wrote.

Gaffney Cline and Baker Hughes ultimately delivered the report, but the court stated that he imposed a protective order because the resulting papers contained confidential trade information.
Eni Ghana promised to try to file the evidence under secret in any further action, but the parties disagreed on what to do if the Ghanaian courts denied its petition to file under seal, according to Judge Ellison.

"Eni Ghana contended it should be able to file the documents anyway, while Springfield argued that it should be prevented from filing the documents if they could not be sealed," the court's ruling stated.
Judge Ellison eventually sided with Springfield, issuing the protection order in May 2023.

A month earlier, Eni Ghana requested the Texas federal court not to suspend its complaint seeking to compel Baker Hughes to turn up data relevant to the dispute over the oil reserved discovery in foreign courts, describing the stay as "baseless" and "highly prejudicial."
In April 2023, Eni Ghana and another oil firm, Vitol Upstream Ghana Ltd., filed an objection to Springfield's emergency move to suspend its appeal over document discovery. Judge Ellison dismissed the request the same month, stating that Springfield had not demonstrated a reasonable prospect of victory on the merits.

Eni and Vitol, in particular, were attempting to obtain access to a study created by Baker Hughes' subsidiary Gaffney Cline & Associates, which examined the commercial feasibility of the oil find at the heart of the Ghanaian dispute.
Eni and Vitol claimed that the district court ruled in their favor and granted them the requested discovery, but Springfield intervened and filed an appeal. according to them, Springfield's application for a stay is simply an attempt to further delay submission of those papers, perhaps rendering the court's decision irrelevant,

However,in July 2022, Eni and Vitol filed a petition in the Southern District of Texas stating that they had invested $6.2 billion in developing an offshore oil and gas project that includes the Sankofa Cenomanian Oil Field.

In Ghanaian courts, Eni and Vitol are disputing "purported directives" from Ghana's Ministry of Energy compelling them to jointly develop, run, and share the revenues from the Sankofa oilfield with a new offshore oil find known as the "Alina Discovery." They said the directives might result in a multibillion-dollar windfall for the discovery's two owners: Springfield and Ghana's state-owned oil giant, Ghana National Petroleum Corp.

They further stated that there has been no evaluation of the Afina Discovery, which is a critical component in determining economic viability and in their April 2023 filing, Eni and Vitol stated that it was "telling" how hard Springfield fought to hide evidence regarding the Gaffney Cline report.

"The logical inference is that the undisclosed information is harmful to Springfield's case on unitization," they said.

Counsel for Eni Ghana and Vitol Upstream declined and Attorneys representing Baker Hughes, Gaffney Cline, and Springfield did not immediately reply to demands for comment.

NOTES

Eni Ghana Exploration and Vitol Upstream Ghana are represented by Luke A. Sobota of Three Crowns LLP.
Baker Hughes and Gaffney Cline are represented by Edwin S. Gault Jr. and Caroline Upchurch of Forman Watkins & Krutz LLP.
Springfield Exploration is represented Carvalho of Burke Law Group LLP.
The matter is in re:Ex Parte Application of Eni Ghana Exploration & Production Ltd., case number 4:22-mc-01285
In the U.S. District Court for the Southern District of Texas.