Equatorial Guinea: At the Helm of Discovery

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Robustiano Eyegue Mangue, Director General of Hydrocarbons

Equatorial Guinea is driving new exploration activities in 2022 aimed at promoting drilling and yielding discoveries. Energy Capital & Power spoke to Robustiano Eyegue Mangue, Director General of Hydrocarbons, about the Ministry’s resilience through the COVID-19 pandemic and its outlook for 2022.

What is your forecast for the post-COVID-19 recovery of the hydrocarbons sector in Equatorial Guinea?

Increasing production is a fundamental pillar and constitutes a high priority for the Ministry of Mines and Hydrocarbons (MMH). Accordingly, the MMH is promoting an ambitious program in which it is committed to the future for all companies in the hydrocarbons sector to drill new wells. This includes both those that are in the exploration phase and those that are currently producing. The MMH demands that companies undertake this task urgently, as it is an action that will undoubtedly make possible the expected increase in production in the short term. Therefore, our perspective after the crisis and the gradual recovery in crude oil prices is that both the reserves and the production of hydrocarbons will increase between 2022 and 2024; and the post-pandemic economy will recover at a rate in direct proportion.

How was Equatorial Guinea able to maintain its exploration and production activities throughout the pandemic?

It is said that success depends on prior preparation, and without it, failure is sure to come. The Government of Equatorial Guinea and International Oil Companies (IOCs) were very conscious of their commitment to the Work Programs and Budgets agreed to be executed before the pandemic began in 2020. Therefore, it was not a coincidence to have maintained production. Looking ahead, our government is opting for revenue optimization measures. In this effort, we are working to have clear objectives that will help highlight what opportunities might exist, what targets are reasonable, what gaps need to be addressed, what leverage the Government of Equatorial Guinea might have with investors and, ultimately, what types of local content policies might be feasible.

What are your strategic priorities for 2022?

Our priority is to monitor the work programs of operating companies and thus see the level of compliance with the obligations contracted under the Production Sharing Contract (PSC), and above all, the obligations in the exploration phase to promote drilling aimed at increasing discoveries. Strategic priorities in 2022 are mainly based on the WP&B that IOCs are to present to the Ministry for approval with defined goals, objectives and key areas of focus. The main objective of these strategic priorities being to increase crude oil production at lower cost in Equatorial Guinea.

As one of the main producers of Liquefied Natural Gas (LNG) on the continent, what measures are being taken to continue promoting the competitiveness of gas in Equatorial Guinea?

We have one of the best operated LNG plants in the world with a capacity of 3.4 million tons, which runs with no incidents. To continue promoting the competitiveness of LNG in Equatorial Guinea, the Directorate General of Hydrocarbons (DGH) has prepared a Gas Master Plan to plan the production of both national and cross-border gas reserves with clear objectives. In the broader portfolio, Equatorial Guinea is building infrastructure to comply with the LNG2Africa initiative, which will allow the transportation and distribution of LNG from Equatorial Guinea to other African countries. LNG2Africa’s mission is to build relationships and infrastructures to facilitate an intra-African LNG industry.

Equatorial Guinea is revising its Hydrocarbons Laws. To what extent would a revised fiscal and regulatory framework enable greater regional and international investment?

Equatorial Guinea is revising its Hydrocarbons Law to incentivize investment in upstream, midstream and downstream sectors. The revised Hydrocarbon Law aims to enhance investment, attract both regional and international energy participants and accelerate growth and development in 2022 and beyond. We expect the amended law to be more flexible on some critical terms and aligned with the PSC model. I truly believe that these changes are necessary to give IOCs an incentive to explore in Equatorial Guinea during the current downturn. Despite that flexibility, the new law will also incorporate the downstream sector, such as petrochemicals and refineries, which the previous law did not consider.

What strategies are being adopted to optimize efficiencies along Equatorial Guinea’s energy value chain, as well as develop and train the country’s human capital?

Business opportunities are like busses: there is always another one coming. As the government technical arm that oversees upstream oil and gas production, the DGH always seeks change, responds to it and exploits it as an opportunity. Our action plan is ambitious, but not impossible to achieve our goals. To maximize the efficiency of our operations across the entire energy value chain, the DGH has a business model that describes the full range of activities needed to create a product or service. The purpose of this analysis is to increase production efficiency, so that companies in the oil and gas sector can deliver maximum value for the least possible operating and capital costs. Secondly, local content in Equatorial Guinea refers to the extent to which local people and companies are able to participate in the workforce and supply chains of the oil and gas industry. Training of human capital is widely acknowledged as an agent of national development. Providing education or training to people is one of the major ways of improving the quality of human resources, as no nation can survive without a seasoned workforce. Human capital development is crucial for our country, as it is the ultimate capital that propels productivity. 

ECP, in partnership with the Ministry of Mines and Hydrocarbons, will launch the Africa Energy Series: Equatorial Guinea 2021 campaign – comprising a report and documentary – that will serve as a critical tool to navigate the energy investment landscape of one of Africa’s more mature petroleum-producing markets. To participate in the upcoming Africa Energy Series documentaries, please contact editorial@18.198.47.39 and to advertise or sponsor, please contact sales@18.198.47.39.

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Grace Goodrich

Grace Goodrich

Grace Goodrich is a Publications Editor at Energy Capital & Power, where she writes about the intersection of energy, policy and global finance in sub-Saharan Africa's fastest-growing economies. Grace produces our Africa Energy Series investment reports in Angola and Equatorial Guinea (2019), as well as co-authored African Energy Chamber: Road to Recovery (2021).

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