JOHANNESBURG - Equatorial Guinea has awarded concessions for blocks in the oil, gas and mining sector after a bidding process launched in April.
The country's ministry of mines and hydrocarbons announced the winners of the 2019 licensing round at the sidelines of the November 26-29 Gas Exporting Countries forum currently being held in Malabo.
Some of the blocks in the Niger, Duala and Rio Muni basins were awarded to Russian energy multinational Lukoil and GEPetrol, WalterSmith, Hawtai Energy, Noble Energy, Africa Oil Corporation, Vaalco Energy and Levene Energy.
In Equatorial Guinea’s first ever mining licensing round, 15 blocks were assigned for the exploration of gold, silver, bauxite, coltan and other precious minerals.
Blue Magnolia was awarded seven blocks for the extraction of copper, rare earth elements, platinum, gold, uranium, bauxite and plom; Oro Sac ACorp was awarded four blocks for the extraction of ore, silver, copper, zinc, plom and nickel; Akoga Resources was awarded two blocks for the extraction of platinum; and Manhattan Mining Investment Inc and Shefa Minerals SA were awarded one block respectively for ore extraction.
“This demonstrates that Equatorial Guinea can attract significant interest of investors in the petroleum community as well as the mining industry. Hopefully, next year we will attract even more investments to our country,” the country's mines and hydrocarbons minister Gabriel Obiang said.
The government has also signed a cooperative agreement with Russian geological research company Rosgeo and Venezuelan state-owned oil company PDVSA for the study of prospective onshore mining area on Equatorial Guinea's mainland.
It aims to sign production sharing contracts to enter into the next phase of negotiation. All of the blocks were offered on a drill-or-drop basis, with a reduction of signature bonuses to a minimum of $1 million and elimination of all pre-qualification requirements.
The drill-or-drop policy provides each company with an initial two-year period to explore, process seismic data, define well locations, bring in additional investment if necessary and begin drilling. Only after this period, in which a company has the opportunity to evaluate and reduce its risk from the data obtained, will it have to decide whether it wants to proceed with the exploration well or relinquish its license.
Equatorial Guinea’s next licensing round will take place in 2020 and will include a different set of criteria by which to select potential blocks and new acreage on which to bid.