African Licensing Rounds to Take Center Stage at USAEF 2021

As oil prices continue to rebound to near seven-year highs, upstream exploration has returned tothe forefront of the oil and gas industry’s recovery agenda. While the pandemic brought a temporary halt to drilling and other non-essential activities, sub-Saharan Africa continues to hold resource-rich basins with billions of untapped proven oil and gas reserves; and exploration “hotspots” have cropped up across southern, eastern and western regions. On the back of sustainedbarrel prices, several African petroleum marketshave launched – or are in the process of launching – licensing rounds in 2020/2021, complemented byrevised hydrocarbon codes, advancements in seismic data and home to some of the least explored basins globally.

Serving to establishnew horizons for bilateral trade and investment, the upcoming U.S.-Africa Energy Forum 2021, taking place on December 9-10, in Houston, will feature several African ministerial delegations presenting investment projects and licensing opportunities to U.S. operators, finance firms and service providers. The two-day forum focuses on the role that U.S. stakeholders can play in Africa’s energy transition, from strategic mineral extraction, to deep decarbonization technologies, to the continued role of hydrocarbon development in meeting Africa’s rising energy demand. As a result, ongoing licensing rounds present a strategic opportunity for U.S. explorers to engage with and develop offshore acreage with a view to sustainability and low carbon business models, as well as adapt to a shifting policy and investment landscape.

Somalia

Somalia’s Ministry of Petroleum and Mineral Resources launched its first-ever oil and gas licensing round last August, with bids placed on seven deepwater offshore blocks (152, 153, 164, 165, 177, 178 and 204). The East African nation represents one of the final frontier passive margins: its Somali Basin is estimated to contain around 30 billion barrels of oil and has already attracted the interest of major IOCs, with ExxonMobil and Shell entering into a $1.7-million joint venture partnership to explore and develop potential offshore reserves in March 2020. Moreover, the Somali Government recently completed its Petroleum Law that includes a revenue sharing agreement indicating the division of future revenues among the government, member states and local communities.

Liberia

Liberia launched its fourth licensing round in April 2020, comprising nine offshore blocks (LB-25 to LB-33) located in the offshore and underexplored Harper Basin. The acreage includes a spectrum of 2D and 3D seismic, gravity and magnetic data, rendered by subsurface data company TGS. After concluding last February and attracting interest from 64 international oil companies, the Liberia Petroleum Regulatory Authority will issue notice of awards to companies whose bids have been accepted, followed by the establishment of petroleum sharing contracts. Along with Somalia, Liberia recently made changes to its commercial termsin a bid to incentivize foreign direct investment in its upstream space, including more flexible payment terms for signature bonuses and modified mandatory 2D seismic data purchase requirements.

South Sudan

In June, South Sudan’s Ministry of Petroleum (MOP) launched its first Oil Licensing Round, after new dataand analysis identified several highly prospective leads. Ranging from 4,000 to 25,000 km2, available blocks include A2, A5, B1, B4, D2. While South Sudan is certainly not a newcomer to hydrocarbon production, 90% of its oil and gas reserves still remain unexplored and the country is seeking to engage with foreign players beyond China and Malaysia, which have dominated its petroleum sector to date. As a result, the MOP will host a virtual series of data presentations and an international roadshow in promotion of upstream investment opportunities.

Senegal

In one of the most anticipated offshore licensing roundsin the MSGBC Basin, Senegal’s National Oil Company, Petrosen, and the Ministry of Petroleum and Energy, launched its bid round in January 2020, with 12 blocks on offer. Supported by TGS, GeoPartners and PGS, the round provided more than 14,000 km2 of 2D data, over 10,000 Km2 of 3D data and over 50,000 Km2 of Multibeam data with shallow cores and geochemistry. TGS also acquired additional 3D seismic data to offer interested bidders an improved subsurface understanding. Senegal represents another sub-Saharan market that recently amended its petroleum code to make upstream investment more structured and transparent for third parties, coupled with more detailed data made available on existing shallow, deep and ultra-deep assets. New oil and gas legislation, together with the bid round, will be unpacked at the upcoming MSGBC Conference & Exhibition, taking place in Dakar in December.

Energy Capital & Power (ECP) – in partnership with the African Energy Chamber’s U.S.-Africa Committee – invites U.S. companies, investors and organizations to participate in the first-ever U.S.-Africa Energy Forum (USAEF) (December 9-10, 2021, Houston, Texas), introducing American companies to African opportunities. To learn more about how U.S. firms can advance the agenda of sustainable, long-term investment in African energy, please visit www.energycapitalpower.com. To sponsor, speak or attend USAEF 2021, please contact Senior Director James Chester at james@msgbcoilgasandpower.com

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Grace Goodrich

Grace Goodrich

Grace Goodrich is a Publications Editor at Energy Capital & Power, where she writes about the intersection of energy, policy and global finance in sub-Saharan Africa's fastest-growing economies. Grace produces our Africa Energy Series investment reports in Angola and Equatorial Guinea (2019), as well as co-authored African Energy Chamber: Road to Recovery (2021).

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