Tribunal orders Ghana to suspend new drilling in Ivory Coast dispute

Ghana has been ordered to suspend further drilling adjacent to existing oil and gasfield development already under way in waters whose sovereignty is disputed by its neighbour, the Ivory Coast.

The decision was delivered by the International Tribunal for the Law of the Sea, based in Hamburg, on Saturday following hearings from legal representatives of both countries held in March.

In spite of the ban of new exploration, the adjudication may not necessarily be viewed as bad news for Tullow Oil, the London-listed oil company which is part way through work on the so-called so-called Ten fields caught up in the dispute.

Although the tribunal ruled that further work in the area would be detrimental to Ivory Coast's interests ahead of a final judgment on where the maritime border lies, it also backed Ghana's right to continue operations on development already under way.

According to the tribunal's findings: "The suspension of ongoing activities conducted by Ghana in respect of which drilling has already taken place would entail the risk of considerable financial loss to Ghana and its concessionaires and could also pose a serious danger to the marine environment".

Both countries were ordered to present further evidence and arguments in May in the next stage in resolution of the dispute which could take until 2017.

On Saturday Tullow executives were assessing the impact of the ruling on its ability to push ahead with work at the Tweneboa, Enyenra and Ntomme (Ten) fields under dispute, which Ghana first approved for commercial exploitation in 2013.

"Following this ruling, the Ten project can move ahead and we will now await instructions from the Government of Ghana with regard to implementing those provisional measures that have been ordered by ITLOS," Tullow said

Tullow owns under half of the £3.5bn Ten project, which is expected to produce up to 80,000 barrels of oil a day. Its previous attempts to sell down its stake in the project failed, leaving it heavily exposed to the success of further investment and speed with which cash flows can be delivered from the development.

In February Tullow said it expected to spend a further $1bn on the half-completed project this year, with first oil expected to be produced from the fields by the middle of 2016.

But any further work beyond that required on those projects already under way in the disputed waters is now banned ahead of definitive ruling on where the border lies or bilateral agreement between the countries to delineate their territorial waters.

According the ruling:

Ghana has been directed to " take all necessary steps to ensure that no new drilling either by Ghana or under its control takes place in the disputed area";

Ghana is obliged to "carry out strict and continuous monitoring" on existing projects to ensure protection of the marine environment;

Both Ghana and Ivory Coast "shall pursue co-operation and refrain from any unilateral action that might lead to aggravating the dispute".

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