Equatorial Guinea’s Ministry of Mines and Hydrocarbons has signed three production sharing contracts (PSCs) with international oil and gas independents Africa Oil Corp and Panoro Energy, with the aim of boosting exploration and production across the country’s promising offshore blocks.
The three PSCs include two agreements with Africa Oil Corp to boost activities in Blocks EG-18 and EG-31, offshore Equatorial Guinea, and signal the entrance of the Canadian oil and gas company into the Equatorial Guinean market.
According to the terms of the agreements, Africa Oil Corp will own an 80% interest in each of the two blocks while national oil company GEPetrol will own 20%.
Up to $7 million is expected to be invested as Africa Oil Corp explores and develops several gas prospects in Block EG-31 and the highly-prospective basin floor in Block EG-18, which the independent says is similar to those found offshore Namibia and South Africa where giant discoveries have been made.
Owing to the proximity of the gas reserves in EG-31 to existing liquefied natural gas (LNG) infrastructure such as the Alba fields and Punta Europa LNG terminal, the development of the block will enable Equatorial Guinea to achieve low-cost and low-risk gas production while boosting the country’s LNG portfolio, thereby consolidating the country position as a global energy exporter.
Keith Hill, President of Africa Oil Corp, stated that, ” While we continue our primary focus on cash flowing production assets in order to underpin sustainable shareholder distributions, we still look to add exploration blocks with attractive fiscal terms in advantaged areas where discoveries can be quickly appraised and brought on stream. Block 31 offers the potential for low-risk gas prospects that are in a proven petroleum province with infrastructure and ullage for significant additional volumes of gas.”
Meanwhile, the Ministry of Mines and Hydrocarbons awarded a 56% participating interest and operatorship of Block EG-01 to Panoro Energy. As part of the contract, Panoro Energy and its partners in the block, namely, Kosmos Energy (24%) and GEPetrol (20%), will conduct subsurface studies leveraging existing data to evaluate the hydrocarbon reserves present over a period of three years.
John Hamilton, CEO of Panoro, commented that, “The award of Block EG-01 is a natural and complementary expansion of our portfolio in Equatorial Guinea and in line with our infrastructure led exploration strategy, increasing our access to a large inventory of oil prospects and leads within tie back distance of existing production facilities for a modest financial exposure. Panoro is pleased to become an operator in Equatorial Guinea and will seek to leverage its core subsurface skill set.”
