S’Leone Signs $225m Offshore Oil Deal with Nigeria’s Marginal Energy

In a move aimed at revitalizing its under-explored upstream sector, Sierra Leone has inked a significant petroleum license agreement with Nigeria-based Marginal Energy Limited. This deal grants the Nigerian independent company offshore exploration and production rights across five blocks – G-145, G-146, G-147, G-160, and G-161 – covering an area of about 6,800 square kilometers.

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The licence, signed through the ​Petroleum Directorate of Sierra Leone (PDSL), covers offshore ​blocks G‑145, G‑146, G‑147, G‑160 and G‑161, spanning ⁠about 6,800 square kilometres.

The agreement, signed through the Petroleum Directorate of Sierra Leone (PDSL), signifies a substantial commitment from Marginal Energy, which has pledged to undertake a seismic and drilling program with exploration spending expected to exceed $225 million. This investment is a crucial step in unlocking the nation's offshore hydrocarbon potential, which has historically been overlooked compared to its West African neighbors.

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Marginal Energy, a Nigerian independent, has committed to ​a seismic and drilling programme with exploration spending expected to exceed $225 million.

This landmark deal, finalized at the Invest in African Energy conference in Paris, underscores Sierra Leone's proactive approach to attracting international investment. Under the terms, the state will hold a 10 percent carried interest in oil projects and 5 percent in gas during exploration and development, with an option to acquire an additional participating interest of up to 9 percent once production commences. For Nigeria, this represents an opportunity for its independent energy companies to expand their footprint and expertise internationally, while for Sierra Leone, it heralds a potential new era of energy development and economic growth.

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Under the agreement, the state will hold a 10 per cent ​carried interest in oil projects and 5 per cent in ​gas during exploration and development, with an option to acquire an ‌additional ⁠participating interest on a paid basis of up to 9 per cent once production begins.