AOP talks to H.E. Gabriel Mbaga Obiang Lima about new projects in Equatorial Guinea, the country’s accession to OPEC and the conclusion of the EG Ronda 2016 bidding round.
Equatorial Guinea was welcomed into OPEC on May 25. What does the country bring to the producers’ bloc?
When we agreed with the 13 OPEC producers and 10 other non-members to reduce production in December 2016, we took a unified position against instability in global markets. It is in everyone’s interest that the oil price is stabilized. Now as a member we have an even greater responsibility and role. Joining the bloc brings many benefits, with Equatorial Guinea contributing diplomatic weight in Africa, a sizable quota of overall African production, and decades of knowledge and experience. But the ability to express our interests to impact the global energy industry alongside Saudi Arabia and other heavyweight producers is invaluable.
Working together with our fellow OPEC producers in Africa – Nigeria, Angola, Gabon, Algeria and Libya – and worldwide as well as non-OPEC African producers like South Sudan, Congo-Brazzaville and Ghana is the best way to promote positive change. Equatorial Guinea will be a unifying force in global markets and a voice representing African explorers and producers on the world stage.
The Bioko Oil Terminal is the Ministry of Mines and Hydrocarbons’ latest megaproject. Why build large-scale crude and products storage in EG?
The Bioko Oil Terminal (BOT) is a game-changer for Equatorial Guinea. Our upstream sector is already known for innovation and excellence. This extends to our investment in energy infrastructure too. The BOT provides huge benefits to the country and the region: The location of this state-of-the-art facility means we can serve the entire western coast of Africa at a strategic point between North Atlantic, Asian and African markets. Massive economies of scale and new efficiencies will make petroleum products cheaper. The project will stand as a testament to our drive to diversify the economy while still making the most of our abundant resources.
The 1.2 million-cubic-meters capacity BOT will allow Equatorial Guinea to stockpile both crude and refined petroleum products when prices are favorable in the market, and to act as the central point between the oil producers and product importers all over our region. As we diversify we can also realize some of the benefits associated with a downswing in oil prices. Once built, the BOT will be the largest storage facility in West and Central Africa. The regional component of the project truly diversifies the Equatoguinean economy: putting the country in the crosshairs of financial and trading markets, and thereby building local financial capacity, creating employment and reducing imports. Our agreement with Arabian Energy in Jeddah in May 2017 has given the Bioko Oil Terminal project the final push needed to propel the $500 million facility to construction and other partners such as Oranto Petroleum are looking to invest in and use the terminal.
The EG Ronda 2016 bidding round concludes at AOP 2017. What does Equatorial Guinea offer explorers?
Equatorial Guinea has a strong reputation in exploration, with an exploration success rate of 42 percent. We provide a strong regulatory framework for oil and gas companies and aggressively pursue new, innovative project ideas. For example, the Fortuna FLNG project — made possible by Ophir Energy’s very successful exploration efforts in Block R — is a landmark project for Africa, as it will be the first deepwater floating LNG project on the continent when it is completed in 2020. It is expected to be one of only two LNG projects to reach FID this year. Recently the partners of the Fortuna FLNG project signed the umbrella agreement that will get the project to FID in mid-2017. As demonstrated with this project, the Government of Equatorial Guinea is committed to providing a mutually beneficially framework to get projects on stream.
It is this strong track record that attracted companies to the EG Ronda 2016 licensing round even in the face of low and gas prices faced by the industry and an overall reduction in exploration activity. After extending the deadline of the Ronda from November 2016 to April 2017 due to strong interest from global explorers, we are now ready to move to negotiations with successful bidders and get to work exploring the waters of Equatorial Guinea as quickly as possible. Exploration efforts must intensify for Equatorial Guinea to remain a top producer. The potential here is vast and I have no doubt further work will prove profitable for both the nation and our international partners.