Sierra Leone Signs $225m Offshore Oil Agreement with Nigeria’s Marginal Energy

The Republic of Sierra Leone has signed a $225 million offshore oil exploration and production agreement with Nigeria-based Marginal Energy Limited.

The deal was finalized at the Invest in African Energy conference in Paris as part of Sierra Leone’s strategic initiative to revitalize its upstream petroleum sector. Marginal Energy is an independent Nigerian firm focused on exploration and production in marginal fields.

The license, executed through the Petroleum Directorate of Sierra Leone, covers offshore blocks G-145, G-146, G-147, G-160, and G-161, encompassing approximately 6,800 square kilometers.

Read Also:

• Oil Prices Rises Sharply in Global Markets
• Dangote strikes first oil, targets marketable crude within weeks

These blocks are situated in a largely underexplored basin that the Sierra Leonean government is positioning as a frontier destination for oil and gas investment. Marginal Energy has committed to an extensive work program involving seismic surveys and drilling operations.

Under the fiscal structure of the agreement, Sierra Leone will retain a 10 percent carried interest in oil projects and 5 percent in gas during the exploration and development phases.

This arrangement ensures that the state does not bear upfront exploration costs. Additionally, the government holds an option to acquire up to an extra 9 percent participating interest on a paid basis once commercial production commences.

President Julius Maada Bio stated that the agreement reflects the country’s commitment to unlocking its petroleum potential while ensuring long-term benefits for its citizens.

The deal follows a similar recent agreement with Shell, indicating a surge in international interest in the region.

The exploration campaign is expected to generate fresh geological data that could lead to the identification of commercially viable reserves in the coming years.