French independent Perenco has struck a deal to acquire operatorship of the Etinde licence offshore Cameroon from NewAge in a move that could trigger a fresh approach to a challenging gas and condensate project that has been treading water for years.
Multiple development options have been evaluated for Etinde, including floating liquefied natural gas and gas-to-power solutions, plus exporting the gas to Equatorial Guinea, but issues around geology, resources and relationships with the Cameroon government have stifled the ability to get a project moving.
Privately-owned Perenco is already a key operator in Cameroon, with its Kribi FLNG project its showpiece asset in the country, experience from which could inform its development approach to Etinde.
Etinde partner Bowleven said today it has been informed by New Age that the operator has signed a “definitive conditional agreement” to transfer all of its interests in the asset and operatorship to Perenco.
The transaction is subject to customary regulatory approvals by the Cameroon government and the approval of the Etinde partners which also include Russia’s Lukoil and state-owned SNH.
Under the terms of the joint operating agreement, both Lukoil and Bowleven have a 30-day right of pre-emption over New Age's interest.
London-listed Bowleven confirmed that, even if Perenco took over control of Etinde, it will continue to be entitled to a final investment decision payment of $25 million from its partners.
A Perenco spokesperson confirmed the company is in “exclusive talks” with privately-owned NewAge whose major shareholder is Chinese investment house Hopu.
Bowleven chief executive Eli Chahin said: “The prospect of Perenco becoming our partner and operator at the Etinde permit is very positive news.”
“We believe that Perenco's proven Cameroon oil and gas developments and substantial experience provide an opportunity to accelerate our efforts to secure FID and the associated $25 million payment to Bowleven.”
Active in Cameroon since 1993, Perenco operates in the Rio del Rey and Douala basins, with its production last year averaging about 100,000 barrels of oil equivalent per day.
Etinde lies at least 20 kilometres southeast of Perenco’s producing fields in the Rio del Ray basin and some 160 kilometres northwest of its Hilli Episeyo FLNG facility which it charters from Golar LNG.