Lukoil, Waltersmith, Among Winners in Eq Guinea’s Licencing Round

By Foluso Ogunsan

Russian giant Lukoil, Nigerian minnow Waltersmith and US. Independent Noble Oil are among the seven companies awarded concessions for nine blocks in the results of Equatorial Guinea’s 2019 licensing round.

Block EG-27 (formerly Block R) in the Niger Delta Basin, was awarded to Russian energy multinational Lukoil and GEPetrol. Block EG-23 in the Niger Delta Basin, which hosts the Estaurolita gas discovery, was granted to WalterSmith, Hawtai Energy and GEPetrol.

EG-09 in the Douala Basin was awarded to Noble Energy (already an active operator in the country) and GEPetrol.

In the Rio Muni Basin, EG-18 was awarded to Africa Oil Corporation and GEPetrol; EG-03 to Vaalco Energy, Levene Energy and GEPetrol; EG-04 to Vaalco Energy, Levene Energy and GEPetrol; EG-19 to Vaalco Energy, Levene Energy and GEPetrol; Block P to Vaalco Energy, Levene Energy and GEPetrol; and Block EG-28 to GEPetrol.

The Ministry of Mines and Hydrocarbons has also signed a cooperative agreement with Russian geological research company Rosgeo and Venezuelan state-owned oil company PDVSA for the study of prospective onshore mining area on the country’s mainland.

The Ministry aims to sign production sharing contracts as soon as possible to enter into the next phase of negotiation. To work more collaboratively with potential investors, all of the blocks were offered on a drill-or-drop basis, with a reduction of signature bonuses to a minimum of $1Million and elimination of all pre-qualification requirements. The drill-or-drop policy provides each company with an initial two-year period to explore, process seismic data, define well locations, bring in additional investment, if necessary, and begin drilling. Only after this period, in which a company has the opportunity to evaluate and reduce its risk from the data obtained, will the company have to decide whether it wants to proceed with the exploration well or relinquish its license.

Equatorial Guinea’s next licensing round will take place in 2020 and will include a different set of criteria by which to select potential blocks and new acreage