Sierra Leone is in the midst of a licence round as it aims to cash in on a return of interest to the energy sector.
Petroleum Directorate of Sierra Leone (PDSL) director general Foday Mansaray struck a bullish tone in comments to Energy Voice last week.
Sierra Leone launched the round on May 18, he said. “We saw the positive oil prices and realised this was a good time to take action. Europe is thinking again about energy security and where energy supplies will come from,” he said. The West African state aims to “fill that void. The opportunity is now.”
Quite how long this mood of positivity may last is unknowable. Sierra Leone aims to “catch the window” presented by current events, the official noted.
The director general said that while there were challenges for African exploration, financial appetite did exist. Mansaray cited Afreximbank as being willing to support local plans, while companies that were already operating in Africa were also likely participants.
The country is offering 63,600 square km of acreage in a “hugely prospective” area. Speed is of the essence for Sierra Leone’s hopes.
The round closes on September 30. PDSL will take two weeks to analyse the bids and then award licences.
On the move
Mansaray expressed the hope that operators would be able to start exploration immediately.
“We want to build on the discoveries made in the past,” he said. Areas on offer vary from blocks with substantial amounts of 3D seismic to much less well defined areas.
Sierra Leone has previously offered areas via direct negotiations. Mansaray said the role of the PDSL was to determine the best way to secure interest.
“We’ve used both models,” he said. “There’s no right strategy. We’ve got to observe the market to see which is best. Companies do like a time line for things to finish. Now, looking at oil prices, this is the right time for a licence round.”
PDSL also has hopes to extend exploration into the onshore. “We hope to open discussions this year,” Mansaray said. “We’re in the review process for the exploration act.”
The director declined to speculate as to whether an onshore offering would take the form of a bid round or direct negotiations. “We would observe the industry and make a decision from there,” he noted.
Mansaray said PDSL was advantaged in the way in which it was structured. With the agency’s focus on petroleum, he said, PDSL is “very efficient in decision making and we can be flexible. We can reach agreements a lot quicker.”
A number of high-profile companies have explored in the country in the past, including Repsol, Tullow Oil and Anadarko Petroleum. The companies did make discoveries but none passed the commerciality hurdle.
Nigeria’s Innoson Oil & Gas has Block 2020a and the company is in the process of seeking to attract a partner to pursue exploration and drilling. Ryder Scott has provided a recoverable resource estimate of 8.2 trillion cubic feet and 234 million barrels of condensate.
Innoson is in the “first steps of the exploration process”, Mansaray said. Another company, Wildcat Petroleum has a non-exclusive reconnaissance permit, which it signed in May. Wildcat has six months to make a decision on whether it intends to proceed or not.
Cluff Energy Africa did express interest in Sierra Leone’s offshore but ultimately could not reach an agreement with PDSL.