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Sierra Leone embarks on 5th Offshore Licensing Round

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In this interview, Director General of The Petroleum Directorate of Sierra Leone (PDSL), Mr. Foday Mansaray, discusses the announcement of the nation’s newest and most exciting Licensing Round and the potential to explore for oil and gas in Sierra Leone.

What is the current state of the 5th Offshore Licensing Round and what can you tell us about the prequalified companies and the opportunities they bring to Sierra Leone?

Sierra Leone’s 5th Offshore Licensing Round was officially launched on 18 May 2022 during the African Energy Summit at the Mayfair Hotel in London. The Licensing Round will close on 30 September 2022 during which all interested companies are expected to submit their bids. Prequalified companies will be issued a ‘Notice of Qualification’ and subsequently be invited for negotiations.

Having officially launched on 18 May 2002, we have only just completed a comprehensive list of international oil companies (IOCs) who have been ‘Specially Invited’ to apply for prequalification, where The Petroleum Directorate of Sierra Leone (PDSL) assesses their complete financial, technical and HSE capabilities.

Map: PDSL

This list has been compiled taking cognisance of the IOCs’ global reputation and operational history. We are very optimistic of forming a long-lasting partnership between Sierra Leone and any number of these companies. As we speak, we have received applications from 3 companies; anything decided in the meantime will be communicated to the oil and gas community at the conclusion of the Licensing Round, post 30 September 2022.

What are the steps set by PDSL that a bidder must follow in order to participate, specifically with regards to in-country regulation?

There are 10 very simple and transparent steps that we have devised for companies to follow. We anticipate that it will take 85 calendar days from application to the ratification of a license.

The process would follow the following steps:

● Pre-qualification: a given IOC will submit a formal application for pre-qualification that includes their Work Program, Technical and Financial Capabilities, Health, Safety & Environmental Policies and Corporate Social Responsibility Plan; all must be submitted with supporting documents;
● PDSL will evaluate the IOC’s application and then issue a ‘Notice of Qualification’ for the 5th Licensing Round within 10 Business Days;
● PDSL will invite the IOC for negotiations;
● A Provisional License will be granted to the IOC, upon successful negotiations;
● The IOC will either accept, or decline, the Provisional License;
● If accepted, a Draft Petroleum Agreement is sent to the IOC for ‘No Objection’;
● The Draft Petroleum Agreement is sent to the Ministry of Finance, the Attorney General & The Ministry of Justice for ‘No Objection’;
● PDSL and the IOC sign the Petroleum Agreement;
● The Petroleum Agreement is sent to Parliament for ratification;
● The Parliament ratifies the Petroleum Agreement.

What effect has the Licensing Round, including fiscal terms and company benefits offered, had in the successful promotion of Sierra Leone and its energy market?

The Licensing Round has showcased Sierra Leone’s competitive fiscal terms and predictable regulatory framework, which has attracted interest from various IOCs. The feedback we have received thus far has been very encouraging and positive, especially around the efficiency, simplicity and transparency of our application and awards process. What is very apparent is that the round’s launch has been timely, as Sierra Leone seeks to fill the energy gap created as a result of the global shortage of access to oil and gas.

What is the expected growth for Sierra Leone’s upstream segment, and what recent highlights and milestones can you share with us?

I wholeheartedly believe that Sierra Leone is on the cusp of joining other oil and gas producing nations. Given the success story along the conjugate margin in Guyana, it is only a matter of time until Sierra Leone joins this illustrious group.

Since April 2021, Innoson Oil and Gas (IOG) has been progressing its exploration work program by conducting comprehensive studies and analysis of our seismic data, coupled with remote sensing studies. Moreover, on 13 May 2022, IOG announced an estimated recoverable resource of 8.2 trillion cubic feet of gas and 234 million barrels of oil in their acreage; IOG’s findings have also been independently corroborated by the Ryder Scott Company.

We look forward to the next steps of their work program, which will lead to a drilling campaign in the near future. With a proven working petroleum system with 4 discoveries, from a total of 8 wells drilled throughout its history, we have all the elements required to maintain a petroleum system where hydrocarbons can be found, such as:

● A high-quality mature type-2 source rock with a Hydrogen Index (HI) of 482-795, and a Total Organic Carbon (TOC) of 4-20%. Guyana’s HI and TOC are 450-613 and 4-10% (at Liza-1), respectively;
● A migration path;
● A reservoir rock;
● Stratigraphic and Structural trapping mechanisms; and
● Effective seals.

All these have been proven in our basin, so we’ll keep a close eye on it.

In past years, what binational and private cooperation would you highlight that has brought prosperity to Sierra Leone, and what do you expect to see in the next few years?

PDSL has existing bilateral agreements with GNPC in Ghana, as well as the Ministry of Mines and Hydrocarbons of Equatorial Guinea. These agreements will enhance capacity building and enable Sierra Leone’s petroleum sector to learn valuable lessons from these producing nations.

We are also currently actively engaged with ANPG, PASA and GNPC-Gambia to create a pathway for collaboration between our nations. I firmly believe that collaboration with like-minded institutions will provide an excellent platform for us during our exploration, development and eventual production.

Africa Oil Week’s (AOW) latest edition is scheduled for the first week of October in Cape Town. What does PDSL expect to achieve from its participation?

PDSL has been involved in strategic promotion and marketing of Sierra Leone’s potential and petroleum opportunities. We are always on a mission to form strategic partnerships with IOCs who share our vision of transparency, performance-driven attitude, keen sense of collaboration and drive to become a net producer of oil and gas.

This interview was supplied by Hawilti’s partner, IN-VR. https://www.in-vr.co/

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