Sierra Leone signs $225m offshore oil exploration deal with Nigerian firm

Sierra Leone signed a petroleum licence agreement with Nigeria-based Marginal Energy Limited, granting the company rights to explore and produce oil and gas offshore as the country steps up efforts to attract investment into its largely untapped upstream petroleum sector.

The licence agreement, executed through the Petroleum Directorate of Sierra Leone (PDSL), covers offshore blocks G-145, G-146, G-147, G-160 and G-161. According to a government statement, the acreage spans approximately 6,800 square kilometres in Sierra Leone’s offshore basin.

Marginal Energy, an independent Nigerian oil and gas company, has pledged to undertake extensive seismic surveys and drilling activities under the licence. The exploration programme is expected to attract investment exceeding $225 million.

As part of the agreement, the Sierra Leonean government will retain a 10 percent carried interest in oil developments and a 5 percent stake in gas projects during both the exploration and development phases.

The state will also have the right to acquire an additional participating interest of up to 9 percent on a paid basis once commercial production commences.

The agreement was formalised during the Invest in African Energy Conference in Paris, where Sierra Leone has been actively showcasing its offshore petroleum opportunities to global investors.

The West African nation is also preparing to launch a new offshore licensing round, supported by newly acquired seismic data, in a bid to stimulate fresh exploration activity across its frontier offshore basin.

Sierra Leone President Julius Maada Bio said the agreement demonstrates the government’s determination to responsibly develop the country’s petroleum resources while ensuring that the benefits contribute to national development and economic growth, according to the official statement.