The Petroleum Directorate of Sierra Leone (PDSL), in partnership with GeoPartners Ltd. and Getech Group PLC, announced the reopening of the fourth hydrocarbons licensing round for offshore areas. The round was reopened after a 6-month industry consultation with industry. An initial fourth round was put on hold in September 2018.
So far, eight wells have been drilled offshore Sierra Leone since 1982, with oil shows in 1982 and 1985. No further drilling was done until 2009. A further six wells were drilled offshore Sierra Leone between 2009 and 2013 resulting in four discoveries. Anadarko Petroleum Corp. had three discoveries of natural gas and light oil in the wells Venus-B1, Mercury-1, Jupiter-1 in the year 2009, 2010 and 2012 resp. in Block SL-07, with a further discovery by Lukoil in 2013 in the well Savanaah-1 in Block SL-05/11.
The fourth licensing round represents an opportunity for investors to look at the under-explored region, where blocks are available from near-shore to ultra-deep waters.
Overview of 4th Offshore Licensing Round are hereunder:
• Fully open the Republic’s offshore waters for petroleum licensing.
• Utilize a more flexible pre-defined graticular Block framework as the basis for licensing. The size of each full block is 1,360 sq. km. Applicants are invited to delineate their areas of interest by assembling multiple contiguous blocks. A Licence Application must cover an area which is equivalent to at least 3 Blocks in size and may be made up of a combination of whole and partial Blocks. Overlapping Licence Applications will be reviewed with reference to their relative merits and against the criteria detailed on the published scorecard.
• Launch a Direct Tender for Licence Applications where 50% or more of the application area is in water depths in excess of 2,500m.
• Launch an Open Tender for all other Licence Applications.
• No minimum work programme specifications have been set for the Initial Exploration Period, however the Directorate expects companies to invest in studies, data and other activities that build toward the drilling of exploration wells. Applicants are asked to propose a work programme for the Initial Exploration Period following which they will have the option to enter an extension period.
• To propose Initial Exploration Period technical studies appropriately, all applicants can use the extensive inventory of geophysical and well data owned by the Government of Sierra Leone.
• In addition, potential bidders can now access the previously set up data rooms in Sierra Leone’s capital Freetown and also in London and Houston to view the available 2D and 3D seismic data and all about the eight previously drilled wells. These facilities will allow potential investors to review over 29,000 line-kilometres of 2D seismic data; over 11,000 sq. Km. of 3D seismic data; 2D Marine Gravity data of 10,484 km; 2D Marine Magnetic data of 8,589 km; Aeromagnetic data of 15,500 km; data of 8 wells and Extensive value-added studies and reports.
• To participate in either the Direct or Open Tender, companies must prequalify for that process by fulfilling all financial, technical and HSE elements relevant to their specific application.
The previous three Licensing Round attracted mixed response with four blocks awarded in the first round of 2003 while only one block was awarded in 2004 followed by one more in 2006 that was allocated through direct negotiation in 2006. However, during third round in 2012, eight blocks were awarded and a more robust response is expected this time round especially after PDSL said it has “collated international industry feedback to ensure the success of the bidding round.”
For more information about the tender process, including opening and deadlines dates, pre qualification documents, contractual and fiscal terms, as well as the legal framework, please visit the website of PDSL or Getech Group.