Chevron signs $2 billion offshore exploration and production deal in Equatorial Guinea after successful oil and gas discoveries

Chevron and GEPetrol Sign $2 Billion Production Sharing Contracts in Equatorial Guinea

The African Energy Chamber (AEC) has announced that Chevron and Equatorial Guinea’s state-owned oil company GEPetrol have signed two production sharing contracts (PSC) for offshore blocks EG-06 and EG-11 in Equatorial Guinea, representing a $2 billion investment. These blocks are situated close to producing Block B, which houses the Zafiro field, and are considered highly-prospective for exploration and production.

The AEC views this deal as a crucial step towards reversing production decline in Equatorial Guinea and anticipates a fruitful collaboration between the two companies. Equatorial Guinea, as a major oil and gas producer with proven offshore plays, has the potential to play a significant role in supporting energy security in West Africa.

The recent contracts are part of the government’s efforts to incentivize investment in offshore exploration and reverse the trend of declining national oil output. Formerly held by ExxonMobil, Blocks EG-06 and EG-11 are in deepwater acreage, with EG-06 already featuring an oil discovery at the Acestruz-1 well in 2017.

With the new PSCs, Chevron and GEPetrol will initiate a new exploration and production campaign at the blocks. The contracts outline provisions for minimum investments, exploration programs, sustainable development, and benefits for the state, offering a clear development plan for the assets.

The AEC’s Executive Chairman, NJ Ayuk, highlights the significance of this partnership and the country’s commitment to revitalizing exploration and boosting production offshore. Equatorial Guinea has also seen a surge in activity in recent months, with various companies launching drilling campaigns and exploration projects across different blocks.

Overall, these developments are expected to not only increase oil production but also support Equatorial Guinea’s energy security efforts. The country’s plans to integrate natural gas into its economy and become a regional hub for petroleum further highlight the potential for growth and prosperity in the region.