Africa Oil, Panoro Energy awarded production blocks in Equatorial Guinea

21 February 2023

Canadian oil and gas company Africa Oil has signed two production-sharing contracts (PSCs) with the Republic of Equatorial Guinea for offshore Blocks EG-18 and EG-31.

Equatorial Guinea awards production sharing contracts. (Credit: Maria Lupan on Unsplash)

Under the terms of the PSCs, Africa Oil will obtain an 80% operating interest in each block with the remaining stake to be held by GEPetrol, Equatorial Guinea’s national oil company.

GEPetrol has the option to purchase an additional 15% participating interest in each block.

Africa Oil has identified several gas-prone prospects in Block EG-31, close to the offshore Alba gas field and the onshore Punta Europa Liquefied Natural Gas (LNG) terminal.

The company also identified a large and highly prospective basin floor of Cretaceous age in Block EG-18, which is similar to those in its exploration portfolio in Namibia and South Africa.

Both blocks are covered by 3D seismic data, with $7m in total minimum work commitment in the initial exploration periods, without any drilling commitment.

Africa Oil President and CEO Keith Hill said: “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.

“In Block 18 we see a large turbidite fan that is reminiscent of some of our large discoveries in Namibia and South Africa.

“These blocks offer high-impact value upside for our shareholders at relatively low cost, and we look forward to continued collaboration with the government of Equatorial Guinea to explore and develop its natural resources.”

In a separate development, the government of Equatorial Guinea has awarded UK-based Panoro Energy a 56% participating interest and operatorship of Block EG-01.

Other partners in the block include Kosmos Energy with 24% and GEPetrol with 20%.

Block EG-01 is located in water depths between 30m and 500m, sharing its borders with both Panoro’s partly-owned Block G and Block S.

Equatorial Guinea awarded the block for an initial period of three years, during which the partners will conduct subsurface studies based on existing seismic data.

The partners can sign an agreement to extend the award by further two years, during which they will undertake to drill one exploration well.

Panoro CEO John Hamilton said: “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.

“Panoro is pleased to become an operator in Equatorial Guinea and will seek to leverage its core subsurface skill set and we look forward to working closely with our partners and stakeholders.

“We are grateful to the Ministry of Mines and Hydrocarbons for the award of Block EG-01 and this endorsement of Panoro’s strategy to continue growing its business in Equatorial Guinea.”

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