Russian Lukoil Picks up Ex-Fortuna Block

Russia's largest private oil company Lukoil has won the licence to explore for hydrocarbons in the former Block R, off Equatorial Guinea, according to the mining ministry. It announced the results of its licensing round November 26.

Now renamed EG-27, the block contains enough gas to justify a floating LNG project: its previous owner was Ophir but it was not able to secure the project finance in time and it surrendered the licence a year ago. The block also contains oil. State GEPetrol is partner in all blocks and Lukoil's only partner in this one.

The ministry hopes to sign production-sharing contracts with all the winners and then progress to the next phase of negotiation. Overall, 17 companies submitted official bids, and seven of them won concessions to nine blocks. Equatorial Guinea has ambitions for an offshore gas megahub, and has signed up Swiss trader Vitol as a partner.

Equatorial Guinea will launch a new oil and gas exploration bidding round early next year and may refuse extensions of existing licenses to oil companies unless they collectively invest a minimum of $2bn in the country, the oil minister Gabriel Obiang Lima told Reuters. He had told NGW in September that he was not happy about the low level of investment by US Marathon in the Alba field, which supplies gas to the sole LNG export facility. Operational since 2007, backfill gas is needed.