Equatorial Guinea is set to re-award the block where former independent Ophir Energy saw its Fortuna floating liquefied natural gas plans fall apart, with Russian companies in the running to land the tract.
EG-27, which is the renamed Block R, is one of seven blocks over which the Ministry of Mines & Hydrocarbons is discussing deals with companies in its 2019 Offshore Licensing Round, with all seven to be awarded by the end of this month.
A total of 27 blocks were put up for grabs in the round, comprising 25 exploration blocks and two appraisal and development tracts – EG-27 and also EG-23, the latter formerly operated by US independent Marathon Oil and containing the Estaurolita gas discovery.
Of the 27, 21 bids were made on 14 blocks.
Minister of Mines & Hydrocarbons Gabriel Mbaga Obiang Lima said at the Africa Oil Week conference in Cape Town on Thursday that the ministry is speaking with companies over seven blocks, although not revealing any counterparties.
“We have seven blocks – and when we say seven blocks, I can guarantee you that those blocks will be signed by the end of this month,” he said.
Winners will be announced at an industry conference in the capital Malabo on 26 November. It is hoped that not only memoranda of understanding but production sharing contracts can be signed at that time also, or at least by the end of the year.
“Our objective is that by the time 2020 arrives, we are talking about the 2020 licensing round,” Obiang said of the country’s next planned round, set to open in January and run to December 2020.
The seven blocks set to be awarded this month are: EG-27 and EG-23, EG-03, EG-04, EG-09, EG-18 and EG-29.
EG-03 and EG-04 are onshore and to the south, while EG-29 is also in the south off the Rio Muni enclave. EG-09 and EG-18 are deep-water tracts.
The 14 blocks to receive bids were, in addition to the seven above: EG-05, EG-08, EG-10, EG-15, EG-17, EG-19 and EG-30.
“I am very confident that those companies that are discussing those seven blocks are serious companies that have the knowhow, the technology and are going to be drilling,” Obiang said.
“The only hint I can give – because it is very important for us – is that definitely for (EG-27), we do have appliers, and definitely some of them are Russian speakers. That’s as much as can say. The rest are from different continents,” he added.
“The only think I can say is that (the block that hosts the would-be Fortuna FLNG scheme) will finally have an applier – it is going to come and hopefully it will be positive for everybody.”
Obiang also said the ministry is being very clear from the off with companies looking to take acreage what is expected of them in terms of exploration and, potentially, development plans.
“Our objective is mainly not the financials – especially the signature bonus – but it is the working programmes. We want to make sure that companies that are coming into the country are not just doing reprocessing, because some of the blocks we already have 2D and 3D seismic on them,” he said.
The exploration blocks will have a first exploration period of two years plus a one-year extension option. In order to move into the second period, there is a drill-and-drop mechanism.
On potential developments, the minister added: “Whoever makes a gas discovery, they already know what we are planning: either floating LNG or taking it into Punta Europa to be able to do tolling or selling the gas – we already have options.”
For any oil discovery close to the Ceiba field, they can speak with operator Marathon about tie-in options to the Ceiba floating production, storage and offloading unit or go for a standalone development.