Côte d’Ivoire – Ghana boundary dispute threatens oil exploration

In 2010, Cote d’Ivoire petitioned the United Nations to complete the demarcation of the Ivorian maritime boundary with Ghana. This occurred just days after the American exploration firm Vanco discovered oil in the Dzata-1 deepwater-well. The Ghanaian authorities responded by passing the Ghana Boundary Commission Bill, establishing a commission with the purpose of undertaking negotiations in order to determine the country’s land and maritime boundaries.

The boundary dispute involves ownership of portions of the country’s second biggest oil field the TEN projects. The Ivorian government formally requested the International Tribunal of the Law of the Sea (ITLOS) for a suspension of oil exploration and production activities in the disputed maritime boundary pending the resolution of the case in 2017.

ITLOS is expected to give its “full verdict” on the dispute in late 2017, although a decision on the “preliminary measures” filed by Cote d’Ivoire should come by the end of April 2015.

The Tano basin is a proven petroleum basin with a prolific hydrocarbon play potential holding an estimated 8 billion barrels of oil equivalent potential. The disputed area covers portions of the Jubilee Field, Tweneboa, Enyenra, the Owo discoveries, West Tano-1X find and the deep-water Tano block in Ghana’s territorial waters. Tullow, Kosmos, Vanco and others are exploring for commercial oil plays in this ultra-deepwater terrain.

Arbitration proceedings which were commenced by Ghana in 2014 in an effort to resolve a dispute with regard to the maritime boundary between Ghana and Côte d’Ivoire fell through.

In its request, Côte d‘Ivoire is asking the Special Chamber to prescribe as provisional measures that Ghana shall; “Take all steps to suspend all oil exploration and exploitation operations under way in the disputed area; Refrain from granting any new permit for oil exploration and exploitation in the disputed area; Take all steps necessary to prevent information resulting from past, present or future exploration operations in the disputed area conducted by Ghana, or with its authorization, from being used in any way whatsoever to the detriment of Ccôte D’ivoire amongst others”.

Côte d’Ivoire questions Ghana’s data

Côte d’Ivoire is questioning the credibility of data and maps presented by Ghana to justify her claim over the Tweneboa-Enyenra-Ntomme (TEN) fields operated by Tullow Oil.

An external lawyer for Ivory Coast stated that “Ghana cannot be trusted to have independently secured these maps and the data without Côte d’Ivoire having copies” and added that “since these maps are in the sole possession of Ghana they should be prevented from using them in this litigation, because the authenticity of these maps cannot be independently verified.”

Côte d’Ivoire is also asking that the tribunal directs Ghana to take steps necessary to prevent information that resulted from the past, ongoing or future exploration conducted by Ghana or with its authorization in the disputed area from being used in any way whatever to the detriment of Cote d’ Ivoire.

Cote d’ Ivoire also wants Ghana to desist and refrain from any unilateral action entailing a risk of prejudice to the rights of Cote d’ Ivoire and any unilateral action that might lead to aggravating the dispute.

Côte d’Ivoire argued in an international tribunal that allowing Ghana to continue oil exploration in a disputed offshore area pending a ruling on their border line would do irreparable damage to its economy and energy policy.

London-listed Tullow Oil is due to finish work on its TEN project in the disputed zone and start pumping oil by mid-2016.

Côte d’Ivoire has submitted a request to ITLOS for a suspension of Ghana’s ongoing exploration activities in the zone pending a final ruling, which could take three years. Côte d’Ivoire said Ghana was accelerating development in the zone, which would leave it to face a fait accompli.

Michael Wood, a special adviser to the Ivorian delegation, said that not granting the suspension “could irreparably compromise Cote d’Ivoire’s entitlement to formulate and pursue a national policy with respect to the use of natural resources”.

Paul Reichler, a member of Ghana’s legal team, said that Côte d’Ivoire had for at least the last 40 years accepted the demarcation that Accra considers to be the boundary between the two nations.

“There was an agreed border separating their respective maritime territories, and it consisted of an equidistant line whose specific coordinates were identified and were reflected in their oil concession agreements,” he said.

The argument was rejected at the tribunal by Ibrahima Diaby, director-general of hydrocarbons for Côte d’Ivoire’s energy ministry.

“I regret that Ghana should rewrite our shared history by asserting that Cote d’Ivoire expressly accepted as a maritime boundary between the two states the line along which oil blocks were granted by the two states,” he said.

Ghana downplayed fears of a possible suspension of the TEN project earlier after Côte d’Ivoire introduced its request, saying a ruling in favour of the Ivorian government was “highly unlikely”.

Ghana says claims by Côte d’Ivoire unfounded

Ghana’s legal team led by Attorney-General Marietta Brew Oppong-Appiah prayed the court to dismiss Côte d’Ivoire’s claims since it could cost the nation over 2.2 billion dollars by 2017. In her introductory remarks, Marietta Brew Oppong-Appiah, Attorney-General and Minister of Justice argued, that the claims of Côte d’Ivoire were unfounded and unjustified.

“If the order were granted and all work had to stop, it will have a devastating impact on our oil production” she maintained and also accused Ivory Coast of making “unfound allegations” against Ghana and Tullow Oil company.

But the Ivorian legal team disagrees. To them grave damage has already been caused to their country because of Ghana’s stance on the ownership of the block.

Cote d’Ivoire opened its case in the morning, also insisting that “grave damage” has “already been caused and continues to cause grave damage” to their country because of Ghana’s stance that the territory is theirs.

Tullow’s position

Tullow Oil in a statement said that it has been advised by the government of Ghana that the government of Côte d’Ivoire has applied for provisional measures to be ordered in Ghana’s maritime boundary dispute with Côte d’Ivoire which is in arbitration before a Special Chamber of the International Tribunal of the Law of the Sea (ITLOS) in Hamburg.

The provisional measures application includes a request that ITLOS orders Ghana to suspend ongoing exploration and exploitation operations in the disputed area in which the TEN project is situated until ITLOS gives its full verdict which is expected towards the end of 2017.

Tullow understands that a decision on this application for provisional measures should be handed down before the end of April 2015.

Tullow’s advice from external counsel is that Ghana has a strong case under international law that the current boundary location, which follows an equidistance line, will be upheld by ITLOS in accordance with the Law of the Sea Convention to which both states are party. Work on the TEN project continues and remains on schedule and on budget for first oil in mid-2016.

Aidan Heavey, Chief Executive Officer of Tullow Oil, said “Tullow has long had interests in and strong relationships with both Ghana and Côte d’Ivoire and we have conducted our operations in both countries in line with our obligations as a contractor under our Petroleum Agreements and in accordance with international operating standards. Although the arbitration process allows for an application of provisional measures, it is our view that it is in the best interest of all parties that the TEN project continues to move ahead without delay and unencumbered by legal tactics of this nature.”

Tullow lost over $308 million of its market value on March 2 over concerns that the boundary dispute could delay its TEN project.

FRANK UZUEGBUNAM