Africa Oil Corp.

Two ‘highly-prospective’ offshore blocks open doors to Equatorial Guinea for Canadian player

Canadian oil and gas company Africa Oil Corp. has entered into Equatorial Guinea for low-cost, infrastructure-led exploration opportunities, thanks to the inking of two production sharing contracts (PSCs) for two offshore blocks.

Africa Oil Corp.

Africa Oil disclosed on Monday, 20 February 2023, that it had signed two PSCs with Equatorial Guinea for offshore Blocks EG-18 and EG-31, which are subject to ratification by the country’s government. Following the ratification, Africa Oil will hold 80 per cent operated interests in each block with the remaining interest to be held by GEPetrol, the national oil company of Equatorial Guinea.

In addition, GEPetrol has the option to acquire an additional 15 per cent participating interest in each of these two blocks, which are covered by 3D seismic data. The total minimum work commitment for both blocks in the initial exploration periods is a combined total of $7 million, with no drilling commitment.

Keith Hill, Africa Oil President and CEO, commented: “I am pleased to announce our entry into Equatorial Guinea with two highly-prospective offshore blocks. 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. In Block 18 we see a large turbidite fan that is reminiscent of some of our large discoveries in Namibia and South Africa.”

Furthermore, Africa Oil has identified several gas-prone prospects in Block EG-31 in shallow water depths of less than 80 meters and close to existing infrastructure, including the offshore Alba gas field and the onshore Punta Europa Liquefied Natural Gas (LNG) terminal. The company believes that potential future discoveries could present “low-cost, low-risk gas development opportunities,” targeting international LNG markets.

On the other hand, the Canadian player has identified a potentially large and highly prospective basin floor fan prospect of Cretaceous age in Block EG-18, which is similar to those within the firm’s exploration portfolio 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,” concluded Hill.

Equatorial Guinea seems to be ramping up its exploration opportunities to unveil its hydrocarbon potential as another firm, Panoro Energy, was recently awarded a 56 per cent participating interest and operatorship of Block EG-01 located offshore Equatorial Guinea.

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As explained by Panoro, Block EG-01 borders Block G where the company has a 14.25 per cent non-operated interest – which contains the producing Ceiba field and Okume Complex – and Block S, where the firm agreed to acquire a 12 per cent non-operated interest.