Kosmos inks three new PSCs for blocks off Equatorial Guinea
- Business & Finance
The Ministry of Mines and Hydrocarbons of Equatorial Guinea, the national oil company GEPetrol, and the U.S.-based oil company Kosmos Energy have signed three new production sharing contracts (PSC) for Block EG-21, Block S and Block W offshore Rio Muni.
The deal marks Kosmos’ first PSCs in Equatorial Guinea, the ministry said in a statement on Monday, October 23.
Block EG-21 was offered for tender during the EG Ronda 2016 oil and gas licensing round. Block S and Block W, previously operated by CNOOC and PanAtlantic Energy respectively, were negotiated directly with Kosmos and were not offered under the open bidding round.
Block EG-21 covers 2,495 square kilometers, Block S covers 1,245 square kilometers and Block W is 2,254 square kilometers. In each block, Kosmos will hold an 80 percent stake and GEPetrol will control the remaining 20 percent.
Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima said: “Kosmos Energy has demonstrated extraordinary and consistent success in frontier exploration projects in West Africa. We trust Kosmos will bring important knowledge and technology to Equatorial Guinea, an established oil and gas producer in Africa with proven potential. We look forward to working with Kosmos as we continue to push the boundaries in oil and gas exploration.”
The ministry noted that Kosmos Energy has already earned a reputation as a top frontier explorer in West Africa, having made mega-discoveries off the coasts of Senegal and Mauritania. Kosmos made one of the largest finds in a decade in West Africa with Ghana’s Jubilee field in 2010. Triton Energy, where Kosmos co-founder Brian Maxted served as senior vice president for exploration, was responsible for a series of discoveries in the Rio Muni basin in Equatorial Guinea, including the Ceiba field in 1999.
The PSCs for the block are based on Equatorial Guinea’s model PSC and stipulate minimum work programs that comprise a first exploratory period of three years, which include acquiring seismic data; a second exploratory period of two years, which includes drilling an exploratory well; and the possibility of two one-year extensions, which include requirements to conduct seismic interpretation and drill another exploration well, respectively. The PSC also stipulates spending on local content and social responsibility.