Chevron, Equatorial Guinea Ink PSC For Offshore Block
Energy supermajor Chevron has signed an agreement with the government of Equatorial Guinea for Block EG09, located in the Douala Basin on the border with Cameroon.
With this agreement, Chevron gains 80 percent ownership while GEPetrol holds the remaining 20 percent.
Chevron entered the Equatorial Guinea market through the acquisition of Noble Energy. The merger was completed in October 2020 for $13 billion.
Having completed the Alen Gas Pipeline project – a 950 million cubic feet pipeline linking the Alen gas field in the Douala Basin offshore Equatorial Guinea to existing onshore processing facilities. First gas was achieved in February 2021.
The African Energy Chamber said that Chevron would carry out a work program that would lead to the potential development of Block EG09 with help from the government.
Several major finds over the last decade emphasize the potential of the Douala Basin. During the country’s 2019 bid licensing round – whereby 7 companies were selected and attributed concessions for 9 blocks – at the time, Block EG09 was awarded to Noble Energy and GEPetrol.
Block EG09, previously explored by South Africa’s PetroSA, has the potential to hold sizeable oil and gas reserves owing to its close proximity to other blocks where large-scale discoveries have been made.
Notably, in August 2019, Noble announced the discovery of oil at the Aseng 6P well in Block 1 – which is already producing and located north of Block EG09.
“We welcome this agreement as this is a confirmation of the amazing prospects that still exist in Block EG09. With the right exploration game and technology, we believe that Chevron will be successful in delivering hydrocarbons that will further position Equatorial Guinea as a top African producer,” stated Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea.
“We believe in the success of this block. Our government is committed to providing the support needed to deliver successful exploration and unlocking hydrocarbons in this basin,” he added.
Equatorial Guinea, despite being a relatively small country geographically, holds some of the largest oil and gas reserves in Africa – gas reserves are estimated at 1.5 trillion cubic feet while oil reserves are estimated at 1.1 billion barrels.
With ambitions to establish the country as a Gas Mega Hub, the government has implemented a series of policy frameworks to incentivize investment and drive development.
This agreement serves to enhance this ambition, demonstrating the exploratory potential of the country and the role that hydrocarbons will play in accelerating economic growth.
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