VAALCO Energy Secures Landmark Production Sharing Contract for Block P Offshore Equatorial Guinea

The African Energy Chamber (AEC) has praised this achievement, viewing VAALCO Energy's efforts as pivotal in reversing production declines in Equatorial Guinea.

Houston-based VAALCO Energy has announced the finalization of a landmark production sharing contract (PSC) for Block P offshore Equatorial Guinea. Approved by the Equatorial Guinea government in March 2024, the PSC grants a 25-year development and production period starting from the approval date.

Block P, which includes the Venus discovery and a significant exploration area, is operated by VAALCO Energy with a 60% stake, while Equatorial Guinea's national oil company GEPetrol and Nigerian firm Atlas Petroleum International each hold 20%. VAALCO Energy is nearing a final investment decision and is set to launch a drilling campaign soon. The Venus conventional oil field is anticipated to commence commercial production in 2026, with peak production expected in 2028.

The African Energy Chamber (AEC) has praised this achievement, viewing VAALCO Energy's efforts as pivotal in reversing production declines in Equatorial Guinea. The PSC marks a critical step towards enhancing long-term energy security in West Africa, positioning Block P as a key contributor to this goal.

VAALCO Energy is also focused on expanding its crude oil production, aiming to increase output to over 50,000 barrels per day by 2027. This goal aligns with the company's strategy to grow production from mature fields. In a strategic move to boost its resource base, VAALCO Energy acquired Swedish offshore exploration company Svenska Petroleum Exploration in March 2024 for $66.5 million. This acquisition includes a 27.39% interest in the Baobab field in Block CI-40 offshore Ivory Coast.

The Baobab field, known for its robust production history and recent upgrades, is expected to offer substantial upside potential. VAALCO plans to dry-dock and upgrade the field's FPSO unit in 2025, which will contribute to increased production from the planned 2026 drilling campaign.

In addition to activities in Equatorial Guinea and Ivory Coast, VAALCO Energy is preparing for a drilling campaign at the Etame block offshore Gabon, with operations scheduled to begin in late 2024. The company has already extracted 127 million barrels from the Etame permit and is focused on maintaining high production levels over the next decade. Efforts include optimizing production through new flowline configurations and final processing before transfer to the FPSO.

VAALCO Energy is committed to community development in its operational regions. Initiatives include the Adopt the Beach program to preserve Cape Lopez Beach in Gabon, partnerships with conservation organizations like Space for Giants, and the Solar Lights project, which aims to illuminate 2,300 rural areas in Gabon. The company also supports Nissi House, which provides shelter to children and families affected by trafficking and labor exploitation. Additionally, VAALCO Energy emphasizes local employment, hiring Africans for its projects and ensuring local leadership.

NJ Ayuk, Executive Chairman of the AEC, commended VAALCO Energy for its dedication to the African energy sector. "With their boots-on-the-ground approach and commitment to African assets, VAALCO Energy exemplifies a strong dedication to advancing energy solutions where they are most needed. Their collaboration with partners on the continent exemplifies a successful integration of financial and technical resources, driving impactful exploration and production programs. We see the company as a major contributor to improving Africa's upstream market and making it more investor-friendly."