French independent Maurel & Prom and Gabon's government have signed a multi-pronged deal to strengthen their cooperation in the upstream sector, a move that also releases much needed funds to the authorities.
As part of this deal, the parties approved the immediate release to Gabon's authorities of $43 million placed in an escrow account that related to pre-2018 carrying costs on the Ezanga permit, plus the payment of a complementary amount of $57 million to the government.
The $43 million corresponds to the debt owed by state-owned Gabon Oil Company to M&P.
In return for the $1200 million, the Libreville-based authorities have signed an amendment to Ezanga Exploration & Production Sharing Agreement that M&P operates with an 80% stake.
The Paris-based player said this EPSA has been extended until 2026 while certain terms have also changed.
In addition, the company has signed EPSAs for the 100%-operated Kari and Nyanga-Mayombe areas, with their exploration periods to run until 2029.
A third element of the deal will see the implementation of a mechanism for M&P to recover certain receivables over time, and which amounted to $98 million at 30 September 2021.
M&P chief executive Olivier de Langavant lauded a deal that the company alluded to in its first half of 2021 results statement in August: "Agreements are being finalised with the Gabonese authorities to find a positive and constructive resolution to this situation, and also to other matters currently ongoing with the Gabonese republic."
In today's statement, he said: “This mutually beneficial agreement attests to the strong common desire of the Gabonese republic and M&P to strengthen their relationship. It highlights (our) long-term commitment in Gabon and further improves the framework to develop the group’s activities in the country."
De Langavant added that the resumption of development drilling in July, together with the recent completion of a magnetic gradiometry survey over the entire Ezanga permit "demonstrate this commitment to maximising the potential of our assets."
Oil production from Ezanga averaged about 19,000 barrels per day in the first half of 2021, some 2000 bpd less than its potential due to Covid-19 related restrictions and curbs linked to OPEC quotas.
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