This interview was originally published in the Africa Energy Series: Equatorial Guinea
AOP talks to Dr. Oliver Quinn, Director of Exploration and Africa of Ophir Energy about Ophir’s plans for Africa and Equatorial Guinea. Ophir Energy is an independent upstream oil and gas exploration and production company focused on Asia and Africa. The group was founded in 2004 and was listed on the London Stock Exchange in 2011.
Are there any plans to expand your reach in Africa? Which plays are you looking into next?
We have had a long history of 14 years in Africa, and whilst we also have businesses in Asia and Mexico, Africa remains a core focus area. We believe there is still a great opportunity in exploration, particularly in West Africa, and that is our main focus. We have picked up a block in Equatorial Guinea recently of course, and that is important for us, but I would say broadly that the Gulf of Guinea area still has a lot of potential.
East Africa is still important to us, although the story of gas there has evolved to one around developing the world-class gas resource that has been discovered.
How would you describe your partnership with Equatorial Guinea and how would you like to see it develop?
In Equatorial Guinea the Fortuna floating LNG project is a critical part of Ophir’s business. It has taken a major effort to bring it close to a final investment decision over the last few years.
It has only been possible to do that because of the strong partnership be- tween Ophir, the state (particularly the Ministry of Mines and Hydrocarbons), and OneLNG. As a partnership in Africa, it is one of our strongest in terms of our relationship with the government and the ability of all project partners to reach an agreement that creates value for all.
One piece of evidence of the strong relationship is that we were recently awarded another exploration block, EG-24, which is testament to our belief in Equatorial Guinea. The country has a clear vision for developing the exploration and production sector and that gives us strong reassurance on the value of our investments in an environment where oil companies are being very selective.
In developing Block R, why was floating LNG the chosen option? Where else do you see FLNG being advantageous in Africa?
As an emergent technology FLNG offers great promise to unlock major gas resources in Africa. Progress in FLNG technology has been good and in Cameroon the first West African FLNG project is underway and we believe will be up and running this year. In Fortuna we have a very strong project and we continue to focus on securing debt financing to allow FID to be taken.
Beyond FID on Fortuna, the Gulf of Guinea area has a lot more opportunity, from a second FLNG vessel at Fortuna to sever- al other discoveries in Equatorial Guinea, as well as in neighboring countries. The marine conditions in the Gulf of Guinea are calm and they favor FLNG. The gas is of high quality, so it favors that type of development. Because of this, we believe there will be a good pipeline of FLNG opportunities over the coming years.
Fortuna looks set to be a leading deep-water FLNG project. How close are you to making a final investment decision?
The project itself in terms of the technical and commercial components is ready. The financing is the final piece and that is currently ongoing in order to reach a timely FID. The process is ongoing and we will update the market as soon as key milestones are reached.
What are some of the topics you are looking forward to hearing about at AOP conferences in 2018?
I think it will be important to hear more about African gas and gas to power. For a lot of these FLNG projects the gas will be sold to Asia, and possibly Europe, but one of the things that needs to be discussed is how to link that gas into African domestic markets and power supply. This is necessary because it is more valuable to deliver gas within Africa and increase provision of reliable and cleaner power supplies. Progress in this area can create winning partnerships for the developers of the gas as well as for the resource holding countries.
These projects have been slow to mature and it has historically been a challenge to integrate the gas and power components. A conversation around integrating upstream gas projects with downstream power providers on the continent is be important. And that is the big gap; it is something everybody recognizes and an area we need to make progress on.
What is Ophir’s message to potential investors looking at Equatorial Guinea at this key moment in the nation’s history, the 50th year of independence?
In terms of Africa, we will remain positive regarding its long-term future, particularly in gas, and in terms of Equatorial Guinea we are also very positive that it remains a highly ranked destination for exploration and production capital investments across gas and oil. There is a very bright future there, particularly in the world of gas and gas development; they have the opportunity to continue being a leading player on the continent and given the size of the country, that is a very big achievement.
This interview was originally published in the Africa Energy Series: Equatorial Guinea
