Oil and Gas Licensing Rounds Across Africa, 2020-2021
Published 05 July 2021
by David Stent, Content Manager, Energy Council
An African energy renaissance may be on the horizon, promising a reversal of fortunes for energy security across the continent. The oil and gas sector had shown exceptional promise prior to the Covid demand drop and subsequent project delays, nowhere else had a comparable rate of new oil and gas field discoveries. The result is a continental energy market that has embraced the potential for rapid development off the back of a natural resource boon.
The Energy Council is taking a look at the licensing rounds announced by a number of African nations. While some rounds had commenced in the past two years, the barriers created by the global pandemic has led to a few rounds being extended beyond their initial licensing periods.
An initial bidding round in 2019 led to successful bids in the Namibe and Benguela Basins. Another round due in 2020 had to be postponed to January 2021. This too was set-back as Angola’s National Oil, Gas and Biofuel’s Agency (ANPG) sought to provide additional time for interested companies to “better understand the file”. The new deadline for the submission of proposals for the 2021 bid round is now on the 9 of July.
The licenses would permit operators access to six blocks as part of the onshore Kwanza Basin (Blocks KON5, KON6, KON8, KON9, KON17 and KON20) and three in the Lower Congo Basin (Blocks CON1, CON5 and CON6). The Agency has announced that a number of shallow offshore blocks in the same basins will come up for bidding later in 2021.
Mozambique has been expected to launch its 6th round of licensing bids, with the intention of attracting a greater number of global operators to their newfound gas reserves. The round has been repeatedly placed on hold as the country manages the dual challenges of Covid economic disruptions and a resurgence of Islamic militants in the north of the country.
The security concerns are a core factor in the delays, more so than Covid, as security concerns must be overcome before re-opening the sector. As it stands, TOTAL has halted their $20 billion offshore gas project until a time that security and safety of staff can be ensured.
However, on the 29 June 2021, the Council of Ministers announced that the successful bids from Eni, ExxonMobil and Sasol in the 5th licensing round of 2015 will likely begin their drilling activities towards the end of the year.
At the start of June, the winners from Nigeria’s 2020 licensing round were announced by the Department of Natural Resources granting licenses to 57 investors in “marginal oilfields in the country’s oil-rich Nigerian Delta”.
It is a particularly exciting round for Nigeria as all 57 acreages awarded were to “100% indigenous oil and gas companies”. Domestic markets have often been at the whim of established international players, therefore the capacity to develop these fields with local companies represents a milestone not only for the country, but for the continental market and its aspirations.
Nigeria is set to benefit from signature bonuses totaling more than $500 million, a welcome boost to the oil-dependent economy that had suffered from the Covid demand declines.
Senegal’s gas sector has enjoyed a run of successful discoveries, revealing some of the biggest new offshore gas reserves in the world. The Ministry of Petroleum had granted an extension of the 2020 licensing round, that had begun on the 31 January 2020 until the new deadline of 30 May 2021.
The round will tender proposals for twelve blocks in the fruitful MSGBC basin, an offshore area shared by Senegal, Mauritania, The Gambia, Guinea Bissau and Cape Verde. For only the second time, the process is being opened to international operators who will partner with Senegal’s national oil company, PETROSEN, to exploit the reserves.
A recent round of licensing in 2019 was not completed, where 18 blocks were awarded and five shallow water blocs were opened to Expressions of Interest – including Blocks CI 102 and CI 503 near the capital Abidjan, and CI 800, 801, 802 closer to the border with Ghana. The pandemic-related disruptions and demand decline has led to the Ministry of Petroleum, Energy & Renewable Energy announcing a “mini-round” this year with the hope of completing the bidding.
The round commenced last month in June 2021 and opened up 25 blocks for potential exploration, while another three are currently under negotiation.
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The 4th and most recent Liberian licensing round ran from 10 April 2020 until 28 February this year, presenting 9 offshore blocks (LB-25 to LB-33) for bidding. These fields were in the offshore Harper Basin, a largely unexploited basin off the West African coast. The round attracted 64 representatives from oil companies around the world.
In 2018, the fourth licensing round began for blocks offshore Sierra Leone. The process encountered many struggles, not least because of disruptive national elections and companies seeking “a more flexible framework”. The rounds finally advanced and reopened in May 2019 until February 2020, after which the government had received 6 successful bids. Two of these bids have been awarded as of April 2021.
Gabon began its 12th licensing round in April 2020, however that had soon run into Covid-related barriers. A suspension of submissions of tenders commenced until 14 May 2021 until 30 June 2021 – in this round 35 blocks were opened for tenders.
The world’s newest nation initiated its inaugural oil licensing round last month that carries on until 23 August 2021. Five blocks will be opened for bidding in the first round, with another 14 remaining open, three having been licensed and four blocks already producing oil. It is an exciting moment for a country that has long-struggled to enjoy the benefits of its resources.