Natural Gas

Cameroon and Equatorial Guinea agree on offshore cross-border gas cooperation

The agreement was signed between President Teodoro Obiang Nguema Mbasogo and President Paul Biya in March 2023.

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President Teodoro Obiang Nguema Mbasogo of Equatorial Guinea and President Paul Biya of Cameroon have signed a cooperation agreement on the development of oil & gas reserves at their maritime border in the Gulf of Guinea.

The agreement was signed in Yaoundé on the sideline of the 15th Ordinary Session of the Conference of Heads of State of the Central African Economic and Monetary Community (CEMAC) on March 17th.

While details on the agreement have not been revealed, it is expected to facilitate the development of gas discoveries on both side of the maritime border between Equatorial Guinea and Cameroon.

An Offshore Gas Megahub in the Making

Equatorial Guinea already produces oil and gas from Alen on Block O and Aseng on Block I, both operated by Chevron Energy since its acquisition of Noble Energy in 2020. The blocks contain the undeveloped Felicita and Yolanda gas discoveries.

Last year, Chevron produced some 56,000 bpd of oil equivalent (net) from Equatorial Guinea, including 12,000 bopd of oil, 7,000 bpd of natural gas liquids and 223 MMscf/d of natural gas.

Just across the maritime border, Chevron also operates the YoYo Block in Cameroon’s Douala Basin which contains the undeveloped YoYo gas discovery.

Map: Noble Energy (2020)

The development of the Yolanda and YoYo gas discoveries could be easily executed by utilizing Equatorial Guinea’s existing infrastructure and processing gas on Punta Europa, where Equatorial Guinea has gas processing infrastructure, including an LNG terminal, a methanol plant, and an LPG plant.

The country has long ambitioned to position its gas infrastructure as a processing hub for stranded gas fields and discoveries in the Gulf of Guinea. In 2021, it completed the Alen Gas Monetisation project that enabled the production of gas from the Alen unit and its transportation by pipeline to Punta Europa where it serves as feedstock for EG LNG and the Alba LPG plant. Future monetization plans include the processing of stranded gas both from Cameroon and Nigeria’s offshore fields.

A Regional Gas Future?

Unlocking the potential of regional gas cooperation in the Gulf of Guinea requires several multi-party, multi-governmental commercial and legal agreements that have so far delayed projects. While the deal signed in Yaounde this week sends positive signals, its nature remains unknown.  

In addition, the joint-development of Yolanda and YoYo would require additional agreements with the operator Chevron. The long-term presence of the major in the region remains uncertain. In December 2021, Chevron signed a Production Sharing Contract (PSC) for exploration block EG-09, just south of its Blocks O and I. But a few months later, Reuters reported that the major had hired investment bank Jefferies to sell its assets in the country.

Meanwhile, other operators in Cameroon could seek to use Equatorial Guinea’s processing infrastructure for their own ventures. This is the case of partners on the Etinde Gas Project offshore Cameroon, who are exploring the option of sending wet gas from the undeveloped Etinde field to Punta Europa before reimporting dry gas into Cameroon via a new 50km pipeline linking both countries.

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Nigeria: Century Group consolidates position in offshore oil & gas market

The Century Group, the only Nigeria-owned company to own and operate floating, production, storage and offloading (FPSO) vessels in Africa, is consolidating its market presence on the country’s offshore oil & gas market. On March 24th, it signed an agreement with Samsung Heavy Industries Nigeria (SHIN) for the renovation of its FPSO Tamara Nanaye. The vessel, previously known as FPSO Front Puffin, previously served as the production hub for the Aje Field on OML 113. As technical partner to the OML 113 operator, Century successfully kept the Aje field operational, productive and profitable from 2014 to 2021. Century Group has now selected SHIN to carry out a de-bottlenecking upgrade to maintain and upgrade the FPSO ahead of its redeployment offshore Nigeria later this year. Hawilti previously reported that the FPSO Tamara Nanaye had been selected to support the redevelopment of the Kalaekule Field on OML 72, operated by West Africa E&P, a joint-venture of Dangote Exploration Assets Ltd and First E&P. “The FPSO Tamara Nanaye is undergoing renovations such as adding topside production facilities, altering flaring capacity, change mooring system to spread mooring and adding a riser porch structure to increase the production capacity of the FPSO,” Century Group said in a post last week. The upgrade of the FPSO locally in Nigeria will allow a shorter renovation timeline than sending the vessel for maintenance overseas, and will reduce the input cost. On April 3rd, Century Energy Group announced another deal to complete, operate and maintain the ELI Akaso floating, storage and offloading (FSO) vessel of Energy Link Infrastructure (ELI). The FSO serves as a new evacuation route to onshore OML 18 and neighbouring fields where production has been severely curtailed by the unavailability of the main evacuation pipeline, the Nembe Creek Trunk Line (NCTL). Under a Risk Service Contract (RSC), Century Group has already deployed its personnel, infrastructure and expertise to finish the spread mooring of the FSO, which is expects to complete on April 10th, 2023. With a storage capacity of 2 million barrels of oil, the FSO can offer a reliable export route for onshore fields seeking access to the export market. The evacuation system includes a 47km undersea pipeline with a targeted throughput capacity of 100,000 barrels of oil per day (bopd) once operational. With both deals, Century Group continues to build local content within segments of the value-chain that are traditionally reserved for international players.

Angola: ExxonMobil to invest $200m in Namibe Basin exploration

Some $200m is being invested into exploring Blocks 30, 44 and 45 in the frontier Namibe Basin offshore Angola, according to the country’s Ministry of Mineral Resources, Petroleum and Gas (MIREMPET). The blocks are operated by ExxonMobil (60%) under Risk Service Contracts signed at the end of 2020 with Sonangol E&P (40%) and the Agency for Petroleum, Gas and Biofuel (ANPG) for the three blocks. On Tuesday this week, the three parties signed a Memorandum of Understanding to pave the way for exploration on the blocks, during a ceremony witnessed by Minister Diamantino Pedro Azevedo. Angola expects some $200m to be invested into seismic studies and the drilling of an exploratory well on the blocks by 2024, according to MIREMPET. In case of a successful commercial discovery, some $15bn could be invested into the development of reserves in the Namibe Basin to start production by 2030.   “Estimated revenue for the State from the development of a single major commercial discovery can range from $20bn to $40bn, given a conservative oil price forecast of $50-60,” MIREMPET said. ExxonMobil has mobilised the Valaris DS-9 drillship offshore Angola until July 2024, the Hawilti/Caverton Offshore Rigs Tracker shows. So far, drilling has focused on the company’s producing Block 15 where a new discovery was made at the Bavuca Sul-1 well last year.