Exxon Awarded EG Block (Updates with 6 Licence Round Awards)

ExxonMobil said June 5 it has signed a production sharing contract for a deepwater block offshore the West African state of Equatorial Guinea, giving no details of any signature bonus.

The exploration block EG-11 covers 1,242 km² some 36 miles west of the capital Malabo; it is adjacent to the Zafiro field in Block B which has been operated by ExxonMobil for more than 20 years. The US major also has an 80% interest in block EG-06, which is adjacent to block EG-11.

After ratification, ExxonMobil will carry out the EG11 work program as operator with 80% state-owned producer GEPetrol holds 20%; the contract includes a commitment to acquire new and reprocess existing 3D seismic data and for the US major to develop further the national workforce.

The award of EG-11 is believed to have been an 'out of round' award, with some reports suggesting the government may shortly announce results of its latest offshore licence round.

Equatorial Guinea mines and hydrocarbons minister Gabriel Mbaga Obiang Lima announced at the Africa Oil & Power conference in Cape Town June 5 that, of 23 firms to have expressed interest in the June 2016 licensing round of which 12 submitted official bids, the following awards have been made: 

•     Ophir Energy for Block EG-24

•     Offshore Equator PLC for Block EG-23

•     Clontarf Energy for Block EG-18

•     Elenilto for Block EG-09

•     Taleveras for Block EG-07

•     Atlas Petroleum and Strategic Fuel Fund for Block EG-10

Zafiro operator for over 20 years

ExxonMobil operates the Zafiro field with 71.25%, alongside GEPetrol on 23.75% and the state of Equatorial Guinea with 5%. The field is in water depths between 400 and 2,800 feet and has produced more than 1bn barrels of oil in its more than two decades of production. It has also produced significant associated gas volumes that were flared, rather than tied into the country's 3.7mn mt/yr EG LNG export complex opened in 2007.

Last month Equatorial Guinea on May 25 agreed to become the 14th member of Opec. On June 2, it was elected as one of the ten non-permanent members of the UN Security Council for the next two years, alongside Côte d’Ivoire, Kuwait, Peru and Poland.

Plans for a Equatoguinean floating liquefaction unit, dubbed Fortuna FLNG, that may start up 2020 remain subject to final investment decision by the UK's Ophir Energy and partners, but the government recently expressed interest in a possible second FLNG unit to monetise gas from Blocks O and I.

Mark Smedley