By Staff Reporter
Johannesburg, March 28 – The African Energy Chamber interviewed Foday B. L. Mansaray, Director General of the Petroleum Directorate of Sierra Leone, to discuss the latest developments in the country’s oil and gas industry. Sierra Leone launched its fifth licensing round in May 2022 to encourage new exploration in the country.
The engagement with the operators has been excellent so far with strong interest from majors, IOCs, and independents. The licensing round closes at the end of September, and the Petroleum Directorate wants technically sound companies that can drill and advance the exploration agenda to partner with them. The country offers 56 graticules and 63,000 ㎢ of area for exploration, including hydrocarbon-rich ultra-deep basins through direct negotiations.
The Petroleum Directorate has simplified the application process, reduced the red tape, and kept only three non-negotiable terms. These include a corporate income tax of 25%, a 10% royalty for oil, a 5% royalty for gas, and a petroleum resources tax. The period from application to ratification has also been improved, and the directorate has only 85 days to make a decision. Sierra Leone’s basins are similar to Guyana’s, where significant discoveries have been made, and they hope to attract major IOCs and a few independents.
Sierra Leone is committed to enhancing its industry growth through local content development. The country has very strong local content laws, and the Petroleum Directorate has existing Memoranda of Understanding (MoU) with Equatorial Guinea, The Gambia, and Ghana. The Directorate has programs and training in petroleum engineering and geology to capacitate local content into the sector. The country is balancing the energy transition with the need for energy security and plans to monetize its resources while ensuring that the sector is ready for future business models and low-carbon operations.
The Petroleum Directorate is actively seeking investors, and they had very fruitful meetings with companies in Qatar around natural gas. The key areas for investment opportunities in the energy value chain include upstream, midstream, and downstream sectors. Sierra Leone recently made a discovery with a small-to-medium upstream company and is looking for companies to develop it to meet the country’s in-country energy needs.
The country signed an MoU for the development of the Nigeria-Morocco-Niger Gas Pipeline, and they plan to tap into the pipeline to meet their energy demands. The Petroleum Directorate will close the licensing round around the time of the 2023 edition of African Energy Week and plans to sign the agreements during the event. The directorate wants AEW to be the platform for a huge announcement, and they are currently speaking to one supermajor. – Namibia Daily News
