US company Kosmos Energy has signed three new production sharing contracts (PSC) with the Ministry of Mines and Hydrocarbons of Equatorial Guinea and national oil company GEPetrol for Block EG-21, Block S and Block W in offshore Rio Muni, West Africa.
The contracts represent Kosmos’ first PSCs in the West African country.
Equatorial Guinea Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima said: “Kosmos Energy has demonstrated extraordinary and consistent success in frontier exploration projects in West Africa.
“We trust Kosmos will bring important knowledge and technology to Equatorial Guinea, an established oil and gas producer in Africa with proven potential.”
Block EG-21 was offered for tender through the EG Ronda 2016 oil and gas licensing round. The block covers an area of 2,495km².
The ministry negotiated directly with the company for Block S and Block W, which cover 1,245km² and 2,254km² respectively.
Kosmos will hold 80% stake in each block, while GEPetrol will own the remaining 20% interest.
The PSCs for the block are based on Equatorial Guinea’s model PSC that sets out an initial exploratory period of three years to acquire seismic data and information of the area.
It will be followed by a second exploratory period of two years with the option of two one-year extensions.
An exploratory well will be drilled in the second exploratory period, while the operating company needs to conduct seismic interpretation and drill another exploration well in the extension period.