Equatorial Guinea’s oil minster Gabriel Obiang Lima told Reuters in Cape Town that the country will offer offshore Block R with the related Fortuna gas development project in the April licensing round, after the concession was reclaimed from Ophir Energy Plc.
Lima said Block R would be one of up to 13 deepwater and ultra deepwater blocks offered in the licensing round on April 1.
Ophir Energy was denied its plan for a floating liquiefied natural gas (LNG) project and also denied an extension in December to its licence for Block R. Losing the block prompted Ophir to say it would report a $300 million non-cash right down in its full-year results.
Equatorial Guinea, which is a member of the Organization of the Petroleum Exporting Countries and Sub-Saharan Africa’s third-largest crude producer, relies heavily on oil and gas exports.
On the sidelines of the Idaho mining conference, Lima said “what we have decided is to present it in the next licence round”. He added that the licensing round was the most transparent way of dealing with Block R and kickstarting the related gas project.
Lima said “this is going to be the first licence round that will have an exploration area (and) a developing area because it will be the Ophir area”. He noted that the offer would include an “invitation for companies to have a joint venture for operating” the block and the related gas development.
The oil minister was making his first public comment on the issue since Ophir lost the block after the company struggled to secure $1.2 billion in loans to fund the LNG plan.
Obiang Lima said the April licensing round would offer at least seven blocks but six more could be offered if additional blocks were reclaimed from the concession holders before April.
According to the minister, “we are giving companies another two more months to confirm their drilling. If they don’t drill we will take it from them so there will be additional blocks”.
In September 2018, Lima revealed that the government might refuse extensions of existing licences to oil companies unless they collectively invest a minimum of $2 billion in Equatorial Guinea.