Sierra Leone has signed a $225 million offshore oil exploration agreement with Nigeria-based Marginal Energy Limited, marking a significant step in its effort to revive interest in its underexplored petroleum sector.
The agreement, announced on Thursday, grants Marginal Energy exploration and production rights across five offshore blocks—G-145, G-146, G-147, G-160 and G-161—spanning approximately 6,800 square kilometres. The licence was issued through the Petroleum Directorate of Sierra Leone (PDSL), the country’s upstream regulatory body.
The agreement was formalised at the “Invest in African Energy” conference in Paris, where Sierra Leone has been actively promoting its offshore licensing opportunities to international investors.
President Julius Maada Bio said the deal reflects the government’s commitment to developing the country’s petroleum resources responsibly while maximizing economic returns for citizens.
Renewed Push for Exploration
The deal underscores Sierra Leone’s renewed push to attract investment into its frontier oil and gas basin, which has seen limited exploration activity in recent years. By partnering with a Nigerian independent operator, the government is betting on regional expertise to unlock potential offshore reserves.
Marginal Energy has committed to an extensive seismic acquisition and drilling programme, with total exploration spending expected to exceed $225 million. The investment is expected to generate new geological data and potentially lead to commercial discoveries that could transform the country’s energy landscape.
Government Stake and Future Options
Under the terms of the agreement, Sierra Leone will retain a 10% carried interest in oil projects and a 5% stake in gas during both the exploration and development phases. The government also holds an option to increase its participation by up to an additional 9% on a paid basis once production begins.
Officials say this structure is designed to balance investor incentives with long-term national benefits, ensuring that the state can share in potential revenues if commercially viable resources are discovered.
Looking Ahead
Sierra Leone is also preparing to launch a new offshore licensing round using updated seismic data, in a broader effort to rekindle exploration interest in its waters. Industry observers say the success of the Marginal Energy project could play a key role in shaping investor confidence in the country’s oil and gas sector.
While the nation has long been considered a frontier market for hydrocarbons, the latest agreement signals growing momentum as West African countries seek to expand energy productionAfrican countries seek to expand energy production and attract capital amid rising global demand.
If successful, the partnership could mark a turning point for Sierra Leone’s upstream industry—positioning it as an emerging player in Africa’s evolving energy landscape.
