New five-year assignment in Equatorial Guinea brings $350 million to Petrofac

UK-headquartered oilfield services provider Petrofac has won a long-term technical services contract to support the operation of the Block B asset off the coast of Equatorial Guinea. This deal has been awarded by Compañía Nacional de Petróleos de Guinea Ecuatorial (GEPetrol), the African country’s national oil company (NOC).

FPSO Serpentina operating on Block B's Zefiro field offshore Equatorial Guinea; Source: Delmar Systems

The five-year contract with a total value of around $350 million will enable Petrofac to deliver technical services on behalf of GEPetrol across onshore support bases, a floating production, storage, and offloading (FPSO), and a platform. This follows the UK firm’s initial scope supporting the transition of the asset from Mobil Equatorial Guinea Inc (MEGI).

Nick Shorten, Chief Operating Officer of Petrofac’s Asset Solutions business, commented: “We look forward to developing our relationship with GEPetrol further, collaborating to extend the life of the field to build a legacy of energy independence and sustainable growth for Equatorial Guinea.

“This award is an excellent example of our strategy in action: selectively growing our geographic footprint and driving value for our clients through late life asset optimisation. Africa is a key focus for our Asset Solutions business and we are pleased to build on our operations in Ivory Coast, Ghana and Senegal and Mauritania with this opportunity in Equatorial Guinea.”

According to Petrofac, the new deal draws on Asset Solutions’ core services, including operations, maintenance, asset integrity, integrity management, marine services, well engineering, project delivery, and supply chain services. The British player will manage the contract from Malabo, supplementing support from its technical hub in Aberdeen, UK. Previous staff and contractors will be retained in various roles.

Antonio Oburu Ondo, Equatorial Guinea’s Minister of Mines and Hydrocarbons, stated: “Our vision is to create a fully capable nationally-operated oil and gas company to manage our assets. Today, I am proud that our vision is becoming a reality. We will grow our economy through diverse partnerships and investment in our people. Combining our strong indigenous capabilities, with Petrofac’s global expertise and experience, we will deliver significant value for our country.”

New operator taking the reins at Block B

Furthermore, Petrofac highlights that the effectiveness of the contract is subject to the satisfaction of several conditions precedent, including the completion of transition arrangements with MEGI and governmental and legislative approvals in Equatorial Guinea.

Teresa Isabel Nnang Avomo, Director General of GEPetrol, noted: “Today’s contract signing marks a key milestone in our journey to becoming operator of Block B on 1 June 2024. We are excited to grow our partnership with Petrofac. By unlocking the huge potential of our indigenous national workforce, we will build with Petrofac’s assistance, an organisation for the long-term management and development of our country’s oil and gas assets.”

The 500,000-acre Block B contains the Zafiro oil field located 68 km (42 miles) WNW of Bioko island, adjacent to the international border with Nigeria. ExxonMobil brought the Zafiro field online in 1996 via subsea wells tied back to the Zafiro Producer floating production unit (FPU). The Zafiro complex is a group of seven mature fields located in the offshore eastern Niger Delta.

A new fixed platform called Jade was added to the complex in 2000 while the Southern Area Expansion project was brought on stream in 2003 using the FPSO Serpentina. ExxonMobil was forced to stop production at theZefiro field in September 2022 due to the water entering the aging FPU Zafiro Producer.

After Boskalis’ subsidiary, SMIT Salvage, secured and disconnected the FPU late in 2022, the Boka Vanguard vessel transported it to Scandinavia in 2023, delivering it to the Modern American Recycling Services (M.A.R.S.) Europe ship recycling yard in the Port of Frederikshavn.

Africa is gaining ground as the new hydrocarbon exploration hotspot, with recent drilling successes in Angola and Namibia pushing the region into the spotlight. While seven African countries produce liquefied natural gas (LNG) for export, several more are looking to join these ranks by 2035, including Senegal, Mauritania, Congo, Tanzania, and Ethiopia.

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As Nigeria and Mozambique also aim to bring several new LNG plants online to supplement existing facilities, Africa is bound to see multiple new LNG production units built over the next decade, enabling the region to carve its place at the top of the upcoming developments in the oil and gas industry.