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Sierra Leone Concludes Fifth Offshore Petroleum Licensing Round

The Petroleum Directorate of Sierra Leone has announced the closure of the country’s fifth offshore petroleum licensing round.

The Petroleum Directorate of Sierra Leone has announced the closure of the country’s fifth offshore petroleum licensing round.

Sierra Leone’s governmental regulatory and administrative body for oil exploration, the Petroleum Directorate of Sierra Leone (PDSL), has announced the successful conclusion of the country’s fifth offshore petroleum licensing round. With several applications having been received from a range of oil and gas corporations, the bidding process officially closed on 29 September.

The licensing round has resulted in three prominent industry players having been pre-qualified as operators for exploration and production licenses in the West African country’s offshore endeavors. Going forward, the PDSL is expected to initiate negotiations with the corporations while Sierra Leone’s parliament ratifies exploration and production licenses for the three companies.

“The successful conclusion of this licensing round marks a crucial step forward in Sierra Leone’s journey towards harnessing its offshore petroleum resources for national transformation,” the PDSL stated in a press release, adding, “The PDSL remains dedicated to promoting responsible exploration and production practices while maximizing the socioeconomic benefits for the people of Sierra Leone.”

The licensing round offers over 63,000km2 of highly prospective acreage, with the West African country home to a working petroleum system supported by oil and gas discoveries that include the Venus-B1, Mercury-1, Jupiter-1, and Savannah-1 wells. What’s more, the country’s hydrocarbon-rich, ultra-deep basins are covered by 3D and 2D data, providing prospective bidders a strong foundation to advance and fast-track exploration.

Boasting a conducive investment and operational environment, terms of agreement under the licensing round include a corporate income tax of 25%; a 10% royalty fee for oil and 5% royalty fee for gas; and a petroleum resources tax. Furthermore, the period from application to ratification is 85 days, showcasing the country’s straightforward application process.

Under the mandate of unlocking the full potential of its hydrocarbon resources, Foday Mansaray, Director General of the PDSL signed a Memorandum of Understanding (MoU) with global energy company, the Nigerian National Petroleum Corporation, and Morocco’s National Office of Hydrocarbons and Mines in December 2022 to contribute to the feasibility of the 6,000km Nigeria-Morocco Gas Pipeline. Development of the pipeline will allow Sierra Leone to tap into – as well as feed into – the region’s resource base to meet the West African country’s energy demands while leveraging its own resources to promote socioeconomic development.

Meanwhile, existing MoUs with Equatorial Guinea, The Gambia, and Ghana are set to facilitate local content development and capacity building in the country’s oil and gas sector as Sierra Leone strives to drive local industry growth. Additionally, the PDSL signed a cooperation agreement with Angola’s regulatory body in charge of the country’s oil and gas activities, the National Oil, Gas and Biofuels Agency, to promote collaboration across the oil and gas sector. The MoU, which was signed in December 2022, outlines opportunities for bilateral trade and investment; positions oil and gas cooperation as mutually beneficial; and reaffirms stronger economic, cultural, and social ties between the two countries.

As such, Sierra Leone is well-positioned to cooperate and collaborate with its regional neighbors to enhance the country’s oil and gas sector growth. Closure of the country’s fifth licensing round will allow Sierra Leone to unlock the full potential of its national hydrocarbon resources, offering access to acreage, competitive fiscal conditions, a transparent and stable government, high-quality data with reprocessing, and world-class conjugate discoveries.

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