By Osordi Ayomide
In a significant move for West African energy cooperation, Sierra Leone has signed a $225 million offshore oil exploration agreement with Nigerian indigenous firm, Marginal Energy Limited.
The deal, signed on the sidelines of the Invest in African Energy Conference in Paris, grants the Nigerian firm exploration and potential production rights over five critical blocks—G-145, G-146, G-147, G-160, and G-161.
Spanning approximately 6,800 square kilometers, the agreement marks a high-stakes effort by the Petroleum Directorate of Sierra Leone to revive its upstream sector, which has remained largely quiet following previous exploration attempts that fell short of commercial viability.
This agreement represents a mechanical milestone in South-South Cooperation within the African petroleum industry. Historically, Sierra Leone’s offshore assets were the domain of European and American majors.
The entry of a Nigerian firm indicates the growing capacity and appetite of indigenous Nigerian oil companies to export their technical and financial “know-how” across the continent.
Mechanically, the $225 million commitment covers intensive seismic surveys and drilling activities, which are essential for de-risking what industry observers still consider “frontier” or “high-risk” assets.
The fiscal framework of the deal is particularly noteworthy for its State Participation Model. By securing a 10% carried interest in oil and 5% in gas, the Sierra Leonean government ensures it remains a stakeholder without immediate financial burden during the capital-intensive exploration phase.
The option to acquire an additional 9% participating interest once production begins suggests a strategic long-term vision to build domestic capacity.
For Sierra Leone, this isn’t just about discovery; it’s about leveraging Nigerian expertise to finally bridge the gap between “geological potential” and “commercial reality.”