The Oil & Gas Year

THE OIL & GAS YEAR The Who’s Who of the Global Energy Industry

EQUATORIAL GUINEA 2015

Equatorial Guinea’s energy outlook Gabriel MBAGA OBIANG LIMA Minister of Mines, Industry and Energy

Progress in a volatile market Mercedes EWORO MILAM Director-General of Hydrocarbons

ISBN 978-1-78302-108-6 Gas potential

9 781783 021086 Juan Antonio NDONG ONDO Director-General

www.theoilandgasyear.com SONAGAS

EQUATORIAL GUINEA 2015 THE OIL & GAS YEAR The Who’s Who of the Global Energy Industry

In partnership with: C

U A ON TE N T N I ID IC AD JUST PAZ 17 34 Diplomacy & Politics Exploration & Production S Equatorial Guinea’s economy is expected to While recent offshore developments, including 2 shrink for a third consecutive year in 2015, as the scheduled introduction of Africa’s first floating

EQUATORIAL GUINEA 2015 the resource-dependent country faces declin- LNG platform at block R, promise to offset Equa- ing production, compounded by the fall in oil torial Guinea’s seven years of production decline, prices. The government’s efforts to strengthen fundamental doubts linger. Low oil prices were foreign trade ties, especially with China, and blamed for the slim interest attracted by the coun- improve its image abroad, must be met with try’s latest licensing round and the pullback on an equal push to increase the flow of goods exploration plans by upstream companies, how- and services with its regional neighbours. ever concerns about the business, social and political environment may also have played a role.

6 THE YEAR IN REVIEW 39 IN PRODUCTION: Hydrocarbons production 40 CANOMP Y PROFILE:Noble Energy 7 INTERVIEW: Gabriel Mbaga Obiang Lima, Minister of 41 ILLUSTRATION: Alen Development Mines, Industry and Energy 42 CANOMP Y PROFILE:Marathon Oil 7 IN GDP: Share of GDP in Equatorial Guinea by sector 43 OPERATIONS REPORT: Start with what you know. Oliver 8 IN RESERVES: Reserves and reserves-to-production ratios Moss, Vaalco Energy 9 THE YEAR’S AWARDS 43 MAP: Block P 10 TIMELINE: 20 years of Equatorial Guinea’s oil production 44 ANCOMP Y PROFILE:Mobil Equatorial Guinea 12 EQUATORIAL GUINEA AT A GLANCE 44 I N THE FIELD: Zafiro field production, 2011-2020 13 INVESTORS INDEX 46 OPERATIONS REPORT: Ahead of schedule. Frank Ene, 14 THE YEAR IN ENERGY RoyalGate Energy 46 MAP: Exploration wells in block EG-08 16 DIPLOMACY & POLITICS 47 MAP: Exploration wells in block Z 48 PROJECT HIGHLIGHT: Fortuna Gasfield Development 17 A: RTICLE Friends and woes. Falling output and low prices 49 MAP: Prospects and development areas in block R pressure the government to open borders to free trade 50 ANCOMP Y PROFILE:GEPetrol 18 INFOGRAPHIC: CEMAC socioeconomic indicators 52 CANOMP Y PROFILE:Hess Equatorial Guinea 19 VIEWPOINT: A policy for the future. Agustín Mba Okomo, MMIE 52 MAP: Okume complex 20 INTERVIEW: César A. Hinestrosa Gómez, MMIE 54 INTERVIEW: André Luiz Crusius Filho, G3 Oil and Gas 21 :ARTICLE Stranded at sea. Boundary disputes have stalled 54 IN PRODUCTION: Top five oil producers in Central and offshore oil and gas projects West Africa, 2004-2014 21 MAP: Gulf of Guinea borders 55 INVESTOR SPOTLIGHTS: PanAtlantic Exploration, 22 INTERVIEW: David Shaw, RPS Energy Glencore Exploration 23 INTERVIEW: Óscar Vicente García Berniko, MMIE 56 INTERVIEW: Arthur Eze, Atlas Petroleum International 23 IN INVESTMENT: Foreign direct investment 56 MAP: Atlas Petroleum blocks in Equatorial Guinea 24 :ARTICLE Beyond oil rents. Equatorial Guinea’s government 57 GEOLOGY REPORT: Intricacies of the Río Muni basin has been ensuring that the oil and gas industry’s effects on the country go beyond oil rents 58 GAS & DOWNSTREAM 24 :RESOURCE Local content requirements in the hydrocarbons industry according to services 59 A: RTICLE Down to business. Equatorial Guinea is embarking on a diversification programme 26 THE STRATEGIC ROUNDTABLE 60 INTERVIEW: Juan Antonio Ndong Ondo, Sonagas 61 I N THE REGION: Natural gas production and reserves in 27 S TRATEGIC ROUNDTABLE PARTICIPANTS selected African countries 28 TSEC OR FOCUS DEBATE 62 ANCOMP Y PROFILE:Total Equatorial Guinea 33 MAP: Available exploration data in Equatorial Guinea 63 COMMENT: The great gas rush. Low oil prices are pushing natural gas into the spotlight 34 EXPLORATION & PRODUCTION 64 :RESOURCE Alba field gas processing 65 INTERVIEW: César A. Hinestrosa Gomez, Gas Exporting 35 A: RTICLE A change of exploration. Despite depressed oil Countries Forum prices, there is still hope in hydrocarbons exploration 66 MAP: GECF members and observers 37 PULLOUT MAP: Oil and Gas Licensing Blocks – 2015 66 MAP: Equatorial Guinea’s offshore gas reserves 38 INTERVIEW: Mercedes Eworo Milam, MMIE 66 I N DEVELOPMENT: Natural gas reserves and discoveries

THE OIL & GAS YEAR | EQUATORIAL GUINEA 2015 www.theoilandgasyear.com The Who’s Who of the Global Energy Industry

EQUATORIAL GUINEA 2015

The Oil & Gas Year is audited by BPA Worldwide C ON TE N T 58 74 86 Gas & Downstream Banking, Finance & Legal The Year’s Focus:

S Downstream Diversiﬁcation The Petrochemicals Revolution of Equatorial With deep cuts to revenue precipitated by 4 Guinea, or REPEGE, will see the ﬁrst domestic falling production and low oil prices, the gov- The construction of a storage terminal on Bioko

EQUATORIAL GUINEA 2015 production of fertilisers, which will both add ernment of Equatorial Guinea can no longer Island is the latest push by the government to value to the country’s reserves and help de- be relied upon to play its historical role as the diversify Equatorial Guinea’s crude export- velop the agriculture sector. The addition of a main ﬁnancier and driver of the country’s do- based economy, with the potential to turn the second train at Punta Europa LNG plant, the mestic industry. The government is turning at- nation into a regional logistics centre. As oil construction of Bioko Oil Terminal and power tention to local private banks and foreign in- prices continue to wallow, plans to develop the projects are extending Equatorial Guinea’s im- vestors for alternative lines of credit, while agriculture, ﬁshing and energy industries under portance down the oil and gas value chain. newly tightened local content laws aim to spur Horizon 2020 cannot come soon enough. growth among local and regional companies.

67 INTERVIEW: Patricia Gallego, Equatorial Guinea LNG 88 IN GDP: Real GDP growth rate in Equatorial Guinea, West 68 VIEWPOINT: Make the switch. José Cruz, Setolazar and Central Africa, 2005-2016 69 ANCOMP Y PROFILE:Atlantic Methanol Production Company 89 P ROJECT HIGHLIGHT: Bioko Oil Terminal 70 VIEWPOINT: Prominence of power. Alfredo Olo Lima, 90 :ARTICLE Downstream on the horizon. The government is Ministry of Mines, Industry and Energy concentrating on nascent industries 70 :IN PRICE Henry Hub natural gas spot price 91 P ROJECT HIGHLIGHT: REPEGE Complex 71 MAP:Equatorial Guinea’s trade relationship with Asia FOLDOUT ILLUSTRATION: Proposed REPEGE facilities 71 IN EXPORTS: Equatorial Guinea’s LNG exports 92 VIEWPOINT: Santiago Edu Ela, Petrochemicals 72 ANCOMP Y PROFILE:SEGESA Holding Revolution of Equatorial Guinea 72 :IN POWER Central African Power Pool generation and 92 MAP: Proposed Alen-Riaba pipeline access spending, 2011-2040 93 P ROJECT HIGHLIGHT: Petroleum Industrial City of Luba 73 TIMELINE: SEGESA’s generation capacity 2001-2017 94 P ROJECT HIGHLIGHT: Industrial City of Mbini 94 MAP: Industrial City of Mbini layout plan 95 CANOMP Y PROFILE: ASPI Group Guinea Ecuatorial 74 BANKING, FINANCE & LEGAL 95 IN TRADE: Number of documents and amount of time needed to trade across borders, 2014 75 A: RTICLE In the name of sustainability. Equatorial Guinea’s overdependence on oil revenues is coming to an end 96 OILFIELD SERVICES 75 IN ENFORCEMENT: Contract enforcement across all sectors, with regional and international comparison BUTTERFLY MAP: Proposed repege facilities illustration 76 IN PROPERTY: Buying and selling property across all 97 A: RTICLE The best of times, the worst of times. The low sectors, with regional and international comparison cost of oilfield services is incentivising drilling programmes 77 INTERVIEW: NJ Ayuk, Centurion Law Group 98 ANCOMP Y PROFILE:Weatherford Equatorial Guinea 78 INTERVIEW: Alfred Kasongo, Ecobank 99 CANOMP Y PROFILE:Services Algoa International EG 78 IN THE BANK: Major macroeconomic indicators 99 MAP: K5 Oil Centre 79 COMMENT: A little goes a long way. A co-investment 100 :RESOURCE Floating production, storage and offloading fund will help diversify Equatorial Guinea’s economy vessel details 80 INTERVIEW: Sébastien Lechêne, PwC 101 INTERVIEW: Nicholas Gillard, SBM Offshore 81 INFOGRAPHIC: Foreign direct investment in the region 101 IN LOCAL CONTENT: Local content requirements 82 VIEWPOINT: Account for change. José Rebollar, Société 102 CANOMP Y PROFILE:GEPsing Générale de Banques en Guinée Equatoriale 103 MAP: Production and storage at the Aseng FPSO 82 AINRI CSONOMP : Public sector debt in 2014 104 INVESTOR SPOTLIGHTS: Texas International, 83 MA RKET ANALYSIS: Financial aid. Nuria Mandje, Schlumberger, Halliburton, Baker Hughes Mandje Global Consultants 105 INTERVIEW: Franck Sauvalle, Luba Oil Terminal EG 83 IN THE BANK: Getting credit rating indicators 84 MA RKET ANALYSIS: Strengthen the financial sector. 106 ENGINEERING & CONSTRUCTION Yves Parfait Nguema, Deloitte 85 INTERVIEW: Pablo Memba Etuba, Grupo Memba 107 A: RTICLE In flux. Construction in the midstream and petrochemicals sectors will get a boost 86 THE YEAR’S FOCUS: Downstream diversification 107 IN CONSTRUCTION: Procedures, time and costs to build a warehouse in 2015 87 A: RTICLE A push to develop. The country is 108 ANCOMP Y PROFILE:Equatorial Consolidated Group embarking on petrochemicals and downstream projects 109 MAP: Equatorial Consolidated Group Yard

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96 108 120 S Oilfield Services Engineering & Construction Marine & Logistics ON TE N T

Despite the fall in oil prices, the subsequent Equatorial Guinea is adjusting to the end of With government encouragement, oil- and gas- C discounts offered by oilfield services compa- an infrastructure boom, which started in 2009 related companies in Equatorial Guinea are 5 nies are incentivising some upstream operators and came to end in 2014 as the country’s moving their operational centres from Malabo to jumpstart drilling programmes. The govern- economy faltered. However, several large on- to Luba, which is the site of upgrade and ex- ment of Equatorial Guinea is encouraging this going projects, including a petrochemicals pansion projects. The move puts the country approach, particularly among smaller players complex at Riaba, an industrial city at Mbini on track to become a regional marine and lo- that have never drilled before. At the same and the Bata regasification project, will con- gistics centre, as rival ports face mounting prob- time, a looming deadline for drilling 2012 li- tinue to provide work for contractors and lems of traffic and piracy. However, Equatorial censes, as well as a new 2014 bidding round, could fill the gap until oil prices rise again. Guinea will first need to resolve uncertainties paint an optimistic future for oilfield services. and increase efficiencies to its Customs system.

110 MA RKET ANALYSIS: Equatoguinean contractors. Marisol 130 ASSOCIATED SERVICES Ovono Nchama, Elite Construcciones 110 AINRI CSONOMP : Value of construction projects by 131 A: RTICLE Bull and bear sector. The local services sector is sector, 2014 pushing through the oil price downturn. 111 IN THE REGION: Refining capacity and throughput 131 IN ELECTRICITY: Process of obtaining electricity GUINEA 2015 EQUATORIAL 112 INTERVIEW: Akin Odumakinde, DeltaTek Energy GE 132 INTERVIEW: Wallace Trew, Nalco Champion EG 113 P ROJECT HIGHLIGHT: Alba B3 compression platform 133 INTERVIEW: James Stephen, Certex EG 114 INFOGRAPHIC: Gasification of Bata thermal station 133 I N QUALITY: World Bank port infrastructure rankings 115 P ROJECT HIGHLIGHT: Bata thermal plant 134 P ROJECT HIGHLIGHT: Rich Ben Group Waste 118 PROJECT HIGHLIGHT: CNG pilot project Management Plant Facilities 135 COMMENT: Embedded talent. Local content laws are 120 MARINE & LOGISTICS creating a change in the oil and gas industry 136 INVESTOR SPOTLIGHTS: FTF Catering Guinea, IPXEG, 121 A: RTICLE Big fish in a big pond. Equatorial Guinea is Office Tech moving towards becoming a regional logistics centre, 137 INSTITUTION PROFILE:National Technological Institute maximising its geographical potential of Hydrocarbons of Equatorial Guinea 121 IN BALANCE: Current account and trade balances 138 INTERVIEW: Victor King, Caba Business Services 122 PROJECT HIGHLIGHT: Luba Freeport Expansion 139 INVESTOR SPOTLIGHTS: Apave GE, Seaweld Manpower 123 MAP: Luba Freeport Supply, Toss WA Corporation 124 MA RKET ANALYSIS: One foot behind the other. Nabil Beers, Akon Logistics Management 140 EXECUTIVE GUIDE 126 MAP: Maritime piracy 128 INVESTOR SPOTLIGHTS: AMT Equatorial Guinea, 141 ACCOMMODATION TLC Equatorial Guinea, Besora Maritima, 143 EVENTS DHL International EG, 146 ACKNOWLEDGMENTS 129 ANCOMP Y PROFILE:CHC Helicopter 147 ADVERTISERS INDEX 129 :IN SHARE Oil rents in Equatorial Guinea, 2009-2013 148 IN BRIEF

Publisher: Emmanuelle Berthemet Editor-in-Chief: Gilles Valentin Regional Director: Ioana Marins Country Director: Tomás Gerbasio Country Co-ordinator: Ana Kesic Managing Editor: Simon Johns Production Manager: Alex Mazonowicz Chief Sub-Editor: Amanda Towle Deputy Chief Sub-Editor: Suzanne Carlson Web Editor: Angus Foggie Co-ordinating Sub-Editor: Daniel Salinas Sub-Editors: Leyla Amur, Jessica-Elise Turner Austin, Jessenia Chapman, John Houghton-Brown, James Kiger, Laura Moth, Jordan Schultz, Matthew Vance Contributors: Omaira Gill, Anna Hirtenstein, Viktor Kotsev, João Marques, Robert Morris, Helena Oh, Christina St. John, Oliver Tree Creative Director: Begüm Alpay Co-ordinating Art Director: Hasan Ilkan Cebeci Art Directors: Javier González, Ahmet Sağır, Didem Tereyağoğlu, Melis Tüzün Circulation & Communication Director: Laura Carr HR: Ece Özmen, Begüm Yurttaş Head of Finance: Hasan Meriç Printing: APA Uniprint Production: The Oil & Gas Year, Ltd. ISBN 978- 1-78302-108-6E-mail [email protected] visit www.theoilandgasyear.com Cover: photograph courtesy of Noble Energy

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7 Equatorial Guinea’s energy outlook Gabriel MBAGA OBIANG LIMA Minister of Mines, Industry and Energy 10 20 years of Equatorial Guinea’s oil production 13 Investors Index INTERVIEW

Equatorial Guinea’s energy outlook W Equatorial Guinea’s offshore hydrocarbons industry has been developing continually, with five new blocks expected to be awarded by the end of 2015. Minister of Mines, Industry and Energy Gabriel Mbaga Obiang Lima speaks to TOGY about what has been done and what will be done to ensure the Gabriel MBAGA reinvention of the country in the offshore and downstream sectors. OBIANG LIMA Minister of Mines, Industry and Energy A R I N REVIE THE YE What does Equatorial Guinea hope to achieve of jobs and demand for our own construction 7 through the construction of projects such as services. During construction and operation, the Integrated Petrochemical Complex in we will attract technology and expertise from Riaba and the Bioko Oil Terminal (BOT)? abroad that will be passed on to our own The Ministry of Mines, Industry and Energy people, as well as recruit and train a large (MMIE) has a long-term vision of transforming number of our nationals. Equatorial Guinea into an energy centre. Both INTERVIEW the BOT and the Integrated Petrochemical Com- How can the MMIE ensure sufficient funding plex in Riaba serve this vision. for downstream projects? Equatorial Guinea has a keen interest in The MMIE has to present upcoming downstream developing its oil and gas industry, establishing projects to international capital communities, itself firmly as a power in West and Central to the energy partners that hold a vision of Africa and gaining access to global oil trading Equatorial Guinea as a regional energy centre flows by investing in assets. and to the banking sector, to attract funds. In the existing economic environment, where crude oil prices have decreased by almost 50 percent since summer 2014, funds will go Bilateral agreements to projects with clear location, supply and lo- between West African gistics advantages. We believe that the BOT and the Integrated Petrochemical Complex in countries and Equatorial Riaba have these characteristics. Guinea can address What role will natural gas play in the Equatogu- inean development plan? inefficiencies in key The MMIE plans to monetise and increase the supply routes. added value of domestic natural gas projects. GDP IN The infrastructure in West Africa is not de- veloped enough to address the growing demand Share of GDP in Equatorial Guinea by for oil and petrochemicals. Through these two sector, 2014 (percentage) new investments, we will be well positioned to accommodate the required logistics efficiently. Other sectors 7 How will these investments serve the supply Construction IN FIGURES and trade sectors in not only Equatorial 5.7 Guinea, but also West Africa as a whole? Extractive activities These assets will serve global trade flows and (other) Number of blocks to be 33.9 regional demand centres. They will be only a awarded by the end of 2015 few hours in sailing time away from key demand centres. Customers can use shipment services 5 Extractive activities from Equatorial Guinea to serve those markets. (oil and natural gas) Integrated Petrochemical Bilateral agreements between West African 53.4 Complex expected urea countries and Equatorial Guinea can address production inefficiencies in key supply routes while pro- moting the security of supply. 1.3 million These investments in infrastructure will have a direct positive impact on national econ- Source: African Economic Outlook, Equatorial Guinea 2014 tonnes per year omy and employment, including the creation

The Who’s Who of the Global Energy Industry THE OIL & GAS YEAR | EQUATORIAL GUINEA 2015 oil Guinea, 43 15.6 10.7 23.2 20.3 52.4 ratio (years) ratio domestic Reserves production to establishment the the l Equatoria in in 2 1.6 1.1 1.5 37.1 12.7 es Oil reserves behind (billion barrels) The Who’s Who of the Global Energy Industry Who of the Global Energy The Who’s content mplex ogic co ocal BP Statistical Review 2015 the l o win contracts in the hydrocarbons Chad is

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COMPARISON The new regulation does not diﬀerentiate The new regulation domestic com- objective is for The ultimate Supported by the private sector, we are we Supported by the private sector, the MMIE these objectives mind, in With w IN Equatorial Guinea Equatorial Republic of Congo industrial Source: Total proved oil reserves and reserves-to- proved Total and in selectedproduction ratios Central countries African West and gas industryhened? be strengt In regu- 2014, a new local content September 20 of the Hydro- Chapter lation that applies to carbons of Equatorialwas adopted. Guinea Law in ensuringThe ﬁrst step appli- the successful and in- domestic inform is to cation of this law ternational companies about the articles and the so that later, in place, clauses that are ministry can demand abidance. 100-percent between that are companies a share those that have from Equatoguinean required. the minimum of 35 percent, panies t government in the development of the local of in the development government of South Biokopopulation oil and by providing gas industrial the city infrastructure in of Luba. Ho industry, generate jobs for locals, with the cor- locals, jobs for generate industry, Treasury. the to of taxes payment responding in a globalised world in which any live We international businesses in terms of input from know-how or updating productive is useful for management processes. What of such as the Mbini Industrial City? the industrialisation of the countryThe plans for partare of its social and economic development. private sector is one of the Equatorial Guinea’s of the economy. engines companies between mixed create aiming to the government and economic and techno- private partners,logical encourage the es- to enter- tablishment of small and medium-sized the exports promote to of locally manu- prises, important areas reinforce factured goods and to of the domestic industrial sector. arrived establish the Industrial at a decision to of Mbini. City Economic Zone and Special - y ro the arl m fro can ent p articul w port? Ho ernm . ree mpanies v co go

p eness, s ’ the 2014 licensing ? oil s of of tendered ock l F the Luba attractiv Guinea l eir been h blocks t b ater igration not uatoria e q v E a We are aiming to are We the m deepw as increase e open-bid h h These measures are necessary are These measures attract to The cost of mandated corporate social re-The cost of mandated y t e h to the K5 Oil Centre Hydrocarbons companies that left K5 by gov- Freeport the Luba to move ernment to mandate port the free will benefit from status in place at they will support In the the same regard, Luba. Th The government is creating and integrating The government is creating na- the diversify to complexes petrochemicals its dependence and eradicate tional economy Equatorial Guinea will co-operateon oil. with countries in the Gulf of all the oil-producing of a The creation gasfields. develop Guinea to gas entity will boost co-operation.regional create mixed companies mixed create between the government and economic and private technological partners. moted MMIE h round for sponsibility, as well as the contributions the as well to sponsibility, Instituteof Hydrocarbons Technological National of Equatorial Guinea, should be cut by 50 roy- schedules for while the payment percent, should alties and the division of hydrocarbons blocks. deepwater be flexible for that will bring economic new actors and investors of the country. the development benefits for W The terms used in the negotiation of shallow- blocks should not be the same as for water The bonus paid by exploration blocks. deepwater and production companies should be reduced $500,000, which $1 million-2 million to from their work programmes. help accelerate would at h t

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THE YEAR IN REVIEW 8 INTERVIEW The Who’s oftheGlobal Energy Who Industry training, employment,corporate socialresponsibility andenforcement. sibilities ofinternationalcompanies, aswelltheMMIEinareas of panies. The neworder aimstoimprove andclarify localcontentrespon- which usedtodeterminelocalcontentobligationsforinternationalcom- new regulation movesawayfrom theformer“gentlemen’s agreement,” 2014. Strengthening Chapter20ofthe2006Hydrocarbons Law, the National Content, MinisterialOrder 1/2014, passedonSeptember26, Agustín MbaOkomo intheapproval ledefforts oftheRegulation of Energy (MMIE)inJune 2015, ofNational formerDirector Content ofMines,Appointed General asSecretary oftheMinistry Industry and A MAN Wärtsilä. The project will cost€24 millionandisexpectedtobeoperational byDecember2015. to belocatednextthethermalstation,whichisbeing converted byFinnish company loadingfacilitywill entailanLNGtruck inMalabo andagasificationplantinBata.The plant is fueloilfordomestically producedimported LNGasthestation’s feedstock.Construction primary ofthe construction In January 2015, underan MMIEinitiative, Spanish engineeringcompany Setolazarbeganthe fortheFortunapartner floatingLNGproject, accelerating thedateoffirstgastomid-2019. agreements. In May 2015, OphirEnergy appointedtheUK’s GolarLNGasthemidstream to ensure viability oftheproject andestablishabasisforsigningthenatural gas purchase natural gasfiscaltermswiththeMMIEandnationaloilcompany GEPetrol thatwere designed of theFortuna floatingLNGproject forblockR’s development.In November 2014, itsigned UK upstream operator Ophir Energy achievedtwo majormilestonesinensuringthedevelopment gust ín O F THE MBA YE

O Bata Thermal Station K A raise theterminal’s totalcapacity storage ofcrude facilities. to1.2mcmandcovertheconstruction such aspetrol, naphtha,diesel,Jet A-1 andfueloilat680,000 cubicmetres. The secondphasewill developmentscheme.two-phase The firstphasewillputtheterminal’s capacity forrefined products terminal, theBioko OilTerminal willbebuiltatPuntaEuropa ofBioko Island inthenorth undera oftheBiokothe MMIEforconstruction OilTerminal. SettobecomeAfrica’s largest oilstorage On December20, 2014, Nigerian oiltrading company Taleveras Group signedanagreement with the Atlantic Methanol Production Company andlocalLNG company EquatorialGuineaLNG. national energy companiesSonagasandGEPetrol, USoperators Marathon Oil,Noble Energy and in2014under collaboration between anniversary thegovernmentofEquatorial Guinea, 10th the diseasehasbeenframed undertheBioko Island Malaria Control Project, whichhadits attheLaPaz Medical Centre inSipopo. The tocombat ongoingdomesticeffort vaccine PfSPZ In March 2015, EquatorialGuinea’s firstthree volunteerssuccessfullyreceived anti-malaria in the2014LicensingRound, blockEG-06, signedinJanuary 2015andratified inApril 2015. its presence inthecountry, MEGIwasthefirstcompany toenteraproduction-sharing contract Zafiro haveprovided theEquatoguineanstatewithmore than$57.5 billioninrevenues. Solidifying 1996, peakingin2004atrates ofmore than300,000 barrels ofoilperday. MEGI’s operations at billionth barrel ofoilpumpedfrom theZafiro fieldinMay 2015. Production attheassetbeganin A veteran intheEquatoguineanoilandgasindustry, Mobil EquatorialGuinea(MEGI)sawits C EXP DOWNSTREAM O OMO R THE AWARDSYEAR’S –EQUATORIAL GUINEA2015 R L POR O R A A TION TE POWER SOCIA

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P A P C R R R OMPAN O O JECT P JECT JECT R O JECT O O Y F THE F THE O F THE O YE YE F THE YE A THE OIL & GAS YEAR A R R YE A R A R | E Q U A T O RIA L G UIN E A 2015

THE YEAR’S AWARDS – EQUATORIAL GUINEA 2015 9 THE YEAR IN REVIEW 2001 2001 Ceiba field. Ceiba established. ompany GEPetrol is GEPetrol ompany US integrated oil US integrated assets including the ompany Amerada Hess Amerada ompany oil c c buys Triton, acquiring all acquiring Triton, buys Equatorial Guinea’s state Guinea’s Equatorial 2000 wells in block G. wells The Who’s Who of the Global Energy Industry Who of the Global Energy The Who’s ation appraisal pro- appraisal ation at the Ceiba oilfield, oilfield, the Ceiba at r Triton begins an explo- Triton gramme and production gramme resulting in 18 successful resulting 1999 Ceiba-1 well. Ceiba-1 eiba field with the C Triton discovers oil at the at oil discovers Triton y and Energy 1998 1998 percent. ION The MMIE launches The Industr deepwater licensing deepwater exploratory licenses. exploratory recovery measures, a measures, recovery quatorial Guinea’s first Guinea’s quatorial The MinistryThe of Mines, tion-sharing contracts round, leading to eight leading to round, E (PSCs) to introduce cost introduce (PSCs) to profit-sharing structure profit-sharing mestic oil from 13 to 20 13 to mestic oil from and raises receipt of do- receipt and raises (MMIE) updates produc- (MMIE) updates T ORIAL T 1997 warded blocks F and G warded in the Río Muni Basin. US firm Triton Energy is Energy Triton US firm a o buys Walter Walter o buys 1995 1995 1995 onMobil farms into UA over the Zafiro field, the Zafiro over lion barrels of oil. of oil. lion barrels block B with UMC. blocks C and D and Nomec ExxonMobil and UMC ExxonMobil Exx cessing capacity the cessing at field and expands pro- field and expands which contains 1.1 bil- which contains Punta Europa complex. Europa Punta International, acquiring International, US oil and gas company operating rights to Alba to rights operating disc UMC receives licenses for licenses receives UMC ouala Basin, 1994 Dorado. Q PRODUC in the D UMC drills its first well drills its first well UMC F E OIL 1992 O

blocks A and B. t United Meridian t United Corporation (UMC) Corporation receives licences for licences receives en US oil and gas independ- S ’ 2015 A E UIN L G

RIA 1990 O T A national and an national ed commercial after ed commercial U

Q The Alba acreage is de- Alba acreage The clar being licensed to US in- to being licensed appraisal well is drilled. well appraisal E dependent Walter Inter- Walter dependent | YEARS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

TIMELINE 20 GUINEA 100,000 200,000 300,000 400,000 500,000 Barrels per day THE OIL & GAS YEAR GAS & OIL THE

W TIMELINE

THE YEAR IN REVIE 10 The Who’s oftheGlobal Energy Who Industry duc US oilandgaspro- is awarded blockP. er Devon Energy 2003 0320 0520 0720 0921 0121 0321 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 in oilandgascontracts is state more participation loyalties andallow the The newhydrocarbons la w to raise minimum Production at theZafiro field peaksa V barrels ofoilperday. Devon discovers the enus fieldinblockP. passed. 2006 2005 2005 t 376,000 duc US exploration andpro- Energy discovers the tion company Noble Aseng oilfield. 2007 the D Noble Energy announces GEPetrol buysDevon for oper $2.2 billion,assuming iega oil discovery in iega oildiscovery atorship inblockP. block I. 2008 2008 C Noble announces the armen oildiscoveryin block O. 2009 PSCs are awarded for blocks 2010 T, U, V andK. C First oilfrom theAseng assumes o arla prospect discovery.arla prospect Anglo-Swiss GlencoreAnglo-Swiss Noble announces the field isachiev block V. 2011 2011 2011 wnership of EG-01,EG-02, EG-04,EG- Marathon isawarded Oil PSCs forblocks The MMIEsignseight a PSCforblockA-12. ed. 04 andEG-05. 2012 2012 THE OIL & GAS YEAR Source: OilCouncil Africa Asse mbly W, Y, Z, TIMELINE one billion ExxonMobil produces its ExxonMobil isawarded from Zafiro field. | block EG-06. E Q 2015 2015 U th barrel ofoil A T O RIA L G UIN E A 2015

TIMELINE 11 THE YEAR IN REVIEW Ebebiyín Mongomo Wele-Nzas Mongomeyén National capital City Port Airport Regional boundary International boundary Maritime boundary Highway Kié-Ntem The Who’s Who of the Global Energy Industry Who of the Global Energy The Who’s Djibloho uction: 243,000 boepd d o ves: 38 bcm (1.34 tcf)ves: s pr eser s r tion: 281,000 bopd US (28 percent), Spain (16.5 percent), China (13.2 Spain (16.5 percent), s: US (28 percent), liquid China (18 percent), Japan (14.9 percent), UK (13.6 Japan (14.9 percent), s: China (18 percent), 1.1 billion barrels 1.1 billion barrels ves: d l ga uc n d e kilometres e kilometres tner tner eser o s a tura Cameroon and Gabon (land); Nigeria, São Tomé and Tomé São and Gabon (land); Nigeria, s: Cameroon r Evinayong CAMEROON CAMEROON CAMEROON e Oil, natural gas, sawmilling gas, natural ies: Oil, Centro Sur t par l ga t par r r o o e oil pr ustr p d tura oven oil r oven oven na oven u y bord r ex imp pr pr International Monetary Fund, World Bank, CIA World Factbook, US En- Factbook, World Bank, CIA World MonetaryInternational Fund, na cr : 28,051 squar 296 kilometres stline: 296 kilometres a in ind jor jor a e a a a © 2015 The Oil & Gas Year Ltd., The Oil & Gas Year Equatorial Guinea 2015. All rights reserved. reserved. Guinea 2015. All rights Equatorial Year Oil & Gas The Ltd., Year Oil & Gas The © 2015 EQUATORIAL GUINEA EQUATORIAL EQUATORIAL GUINEA EQUATORIAL EQUATORIAL GUINEA EQUATORIAL r ces: r A M M percent), France (11.1 percent), Brazil (7.8 percent), (Spain 7.8 percent) (7.8 percent), Brazil (11.1 percent), France percent), M (4.1 percent) d'Ivoire Côte Italy (5.1 percent), (5.7 percent), France percent), 2014 2014 Co Count (maritime) Príncipe 2014 2014 GEOGRAPHY ENERGY Sou BBC, Times, Review 2014, Financial BP Statistical Administration, Information ergy and Energy UNDP and the Ministry Industry, of Mines, Heritage Foundation, GABON GABON GABON Kilometres 02040 Litoral Bata Cogo Mbini 2015 A E 2.51 percent (2015 estimate) 2.51 percent te: Horacio quatorial Guinea quatorial UIN Leven Corisco GABON GABON Bioko L G MALABO CAMEROONCAMEROONCAMEROON owth ra owth July 2015 estimate) Baia de Riaba RIA O 1 1 T A U Central African Economic and Monetary Community, and Monetary Economic Community, African ings: Central tion gr Q Bioko NorteBioko Norte Bioko Norte Bioko E : $6.44 billion Spanish, French, Portuguese ges: Spanish, French, : $13.3 billion Corisco | Malabo, Bioko Island Bioko Malabo, ula oup Punta President Teodoro Obiang Nguema Mbasogo Teodoro President te: Europa 3 percent (2014 estimate) 3 percent te: p me: Republic of E MALABO o l gr ngua Multi-party republic with strong executive branch Multi-party executive l system: with strong republic Punta Santiago Punta San Antonio de Palea tion: 740,743 ( l p l na l city: Annobón a ts 2014 OCEAN NORTH la Loros ts 2014 Luba r r Bioko SurBioko Sur tion ra enc o ula ATLANTIC o jor EQUATORIAL GUINEA AT A GLANCE A AT GUINEA EQUATORIAL ad of sta OCEAN p rr EQUATORIAL GUINEA GUINEA GUINEA EQUATORIAL EQUATORIAL EQUATORIAL Annobón a SÃO TOMÉSÃO TOMÉ ATLANTIC apita Punta Punta Punta Gulf of Guinea AND PRÍNCIPEAND PRÍNCIPE Occura Manjob Officia Exp Imp $17.7 billion (2014 estimate) GDP: ($1:CAF587) Franc African Infla Central y: Annua Cu Politic M He C Po Economic Community of Central African States, African Union, African Union, African African States, African of Central Community Economic of States, Group African-Caribbean-Paciﬁc Association, Producers’ Petroleum Forum Gas Exporting Countries Regiona Argelejos THE OIL & GAS YEAR GAS & OIL THE POLITICS ECONOMY DEMOGRAPHY

W EQUATORIAL GUINEA AT A GLANCE

THE YEAR IN REVIE 12 Source: T he survey conducted by conducted he survey The Oil&Gas Year 2015andMay 2015 in Equatorial Guinea between January The Who’s oftheGlobal Energy Who Industry 11.1% Anti-business Anti-business, butaccommodating Pro-business, butrestrictive Pro-business vis theoilandgasindustry? policies ofthisgovernment vis-à- How would you describethe Extremely diﬃcult Extremely Diﬃcult Easy Very easy in thismarket? anoil and gasbusiness starting How would you rate theeaseof Industry andEnergy, orMMIE,has empha- ofMines,ing suchanoutlook,theMinistry effect throughout thesupplychain. grammes havehada negativetrickledown anddevelopmentdrillingpro-exploratory core contributorstothedecline. along withdepressed oilprices, are likely third yearofrecession inarow. This situation, siderably, from 89.6 in2014, to62.7. The country’s indexscore hasdropped con- concerns onthestatusoflocalmarket. Index saw energy executives reflect their The EquatorialGuinea2015Investors D T

IN EVEL RESPONSE he Equa The cancellationofanddelaysinmany Equatorial Guineaisexperiencingits OPME N T C ONTIN UES to : Notwithstand- 62.7 r i a 2.22 % 57.8 % 28.9 % 6.67 % 57.8 % 2.22 % 33.3 % l

G u Extremely difficult Extremely Difficult Easy Very easy doing businessinthiscountry? How would you rate theeaseof dustrial Petroleum City. in theIndustrial City ofMbiniandLubaIn- ical Complex inRiaba, andChineseinvestors Archean Group intheIntegrated Petrochem- oftheBiokostruction OilTerminal, India’s Taleveras Group inthecon- willparticipate LNG asthemidstream operator in2015. GEPetrol andselectingLondon-basedGolar with theMMIEandnationaloilcompany Ophir Energy securingagasfiscalagreement floating LNGproject continues, withoperator signed bytheendofyear. 09, EG-10 andEG-18, contracts willseefurther direct negotiationblocks, EG-07, EG-08, EG- contract anditisexpectedthatthecountry’s production-sharing sign theblockEG-06 and domesticdownstream projects in2015. sised thedevelopmentofoffshore industry percent favoured thelatter two responses. or “anti-business.” In 2014, ashare of20 opting foreither“anti-business, butrestrictive” “pro-business, butrestrictive” and14percent nearly 58percent offeringaresponse of of respondents statingtheyare “pro-business,” ceived asimproved, withalmost29percent easy”todobusinessinthecountry.or “very percent ofrespondents feelitisstill“easy” the decrease inthegeneral index,about42 C OMMERCIA i Meanwhile, Nigeria-based conglomerate The developmentofblockR’s Fortuna The yearhasalready seenExxonMobil State oilandgaspolicieshavebeenper- n e Difficult 57.8 a 2015Inv L C ONSERV Very easy 4.44 A TION Easy 37.8 : Despite 57.8 % 4.44 % 37.8 % e 0 % THE INVESTORS INDEX s to Highly unstable Unstable Stable Highly stable in thisoilandgasmarket? political andeconomic stability How would you rate thelevel of Corrupt Not transparent Transparent Very transparent market? inthisoilandgas transparency How would you rate thelevel of and gasexecutives, investorsandofficials. 2015 index isbasedontheresponses of45oil pessimistic outlook.TheEquatorial Guinea vestors, whileareading below50indicatesa a positiveperception amongoilandgasin- ofspendinginanygivenmarket.level oil andgasinvestorsasexpressed intheir Index isdesignedtomeasure confidenceamong to staterevenue atatimeoflowoilprices. slight, giventhecontributionofoilandgas percent toaround 84percent in2015is was “stable” or“highlystable.” Adrop of8 believedthatthecountry of indexparticipants MA UT THE INDEX:ABOUT THE BY MARKET 04 08 100 80 60 40 20 0 RKET C A reading above50ontheindex represents Gabon (2014)61.9 Equatorial Guinea(2015)62.7 Angola (2014)72 Nigeria (2015)75.5 Tanzania (2014)89 Republic ofCongo(2014)93.5 de rs In THE OIL & GAS YEAR ONST ANCY | The TOGYInvestors x E In 2014, 92percent Q U A T O RIA L G UIN 15.6 % 17.8 % 4.44 % 62.2 % 8.89 % 66.7 % 24.4 % E A 2015 0 %

THE INVESTORS INDEX 13 THE YEAR IN REVIEW THE YEAR IN ENERGY

26 Energy Minister Gabriel Mbaga Obiang Lima signs a new local content regulation to increase national participation in 16 A new gas discovery Equatorial Guinea’s oil is made at Ophir and gas industry. Energy’s block R 07 Ophir Energy selects THE YE A R I N REVIE through the Silenus 12 Brent crude reaches Excelerate Energy as its East-1 well. Total mean $61.50 per barrel. It is midstream partner for recoverable reserves in the first time barrel its Fortuna floating LNG the block are now 96.3 prices have hit above project in block R. bcm (3.4 tcf). $60 in 2015. 13 The price of Brent crude drops to less than $89 per barrel. 05 Taleveras Group signs a deal to finance W the Bioko Oil Terminal, working with Equatorial 14 Consolidated Group and

THE YEAR IN ENERGY Besix as contractors.

04 Ophir Energy signs 27 The international oil fiscal gas terms with price hits a six-year low Equatorial Guinea for at $44 per barrel. block R in an amendment to the original production- sharing contract. 2014 2015

SEPNOOCT V DEC JAN FEB

06 The China National Offshore Oil Corporation discovers hydrocarbons 16 ExxonMobil with the S-3 well signs a production- in block S, offshore sharing contract for Rio Muni. block EG-06.

02 The China National Offshore Oil Corporation 21 Ophir Energy drills hires a semi- a successful appraisal submersible at a day well in block R. The rate of $330,000 from Fortuna-2 well tests US company Atwood at 1.7 mcm (60 mcf) Hunter to drill one well. per day with a potential of 5.1 mcm (180 mcf) per day. 01 Equatorial Guinea changes tax exoneration regulations, contradicting oil companies’ production- sharing contracts.

26 Equatorial Guinea 03 Oil prices climb extends the deadline about 19 percent from for bids for its 2014 prices four days earlier. licensing round. Brent crude reaches Originally set to close $57.91 per barrel, while September 30, the 10- West Texas block round will now Intermediate comes in close on October 31. at about $53.05.

THE OIL & GAS YEAR | EQUATORIAL GUINEA 2015 The Who’s Who of the Global Energy Industry THE YEAR IN ENERGY

29 Equatorial Guinea 03 The Ministry of and China sign four co- Mines, Industry and operation agreements Energy experiences and a memorandum several changes of understanding including the regarding diplomacy, replacement of some 20 President Teodoro telecommunications, figures and the merging Obiang Nguema construction, of the Department of 13 Glencore announces Mbasogo warns macroeconomic Industry and the oil production from its that Nigeria-based strategy and a line of Department of assets in Equatorial terrorist group Boko credit from the Export- Extractive Industries Guinea has dropped W Haram is a threat to Import Bank of China. Transparency Initiative. to 2.48 million barrels Equatorial Guinea. per year, down 3 13 Ophir Energy plans percent from levels to deploy a second the previous year. floating LNG unit to block R. Chief operating 02 Equatorial Guinea 05 Ophir Energy officer Bill Higgs says ratiﬁes ExxonMobil’s appoints Golar LNG as the unit may not come production-sharing its midstream partner for another decade. A R I N REVIE THE YE contract for block EG-06. for the Fortuna floating LNG project in 15 block R, replacing Excelerate Energy.

08 Equatorial Guinea 18 supports the African The oil price hovers Petroleum Producers around $60 per barrel Association’s call to as crude inventories reduce worldwide oil drop in the US and OPEC production in light of members continue to low oil prices. increase production. THE YEAR IN ENERGY THE

MAR APR MAYJUN JUL AUG

08 Marathon Oil makes a hydrocarbons discovery in block A-12 09 McDermott and sub-area B near its International, GE Oil & flagship Alba field. Gas, Aker Solutions and Subsea 7 are all awarded 01 Equatorial Guinea front-end engineering signs a series of and design contracts by 25The government memorandums of Ophir Energy for the reshuffles key cabinet understanding with Fortuna floating members, appointing 14 Chinese companies to LNG project. new positions such as invest in the petroleum the finance, economy city of Luba and the and education ministers. industrial city of Mbini.

12WorleyParsons signs a deal to provide engineering and project management services for Ophir Energy’s 19 SBM Oﬀshore Fortuna ﬂoating LNG agrees to pay $240 project in block R. 15 12 Marathon Oil million to settle The International discovers light oil with Monetary Fund allegations of bribery the Rodo-1 well in sub- in Equatorial Guinea, concludes its Article 4 area B. mission to Equatorial Angola and Brazil. Guinea, stating that low 03 International oil oil prices and falling prices hit a six-month production are obstacles low, with Brent crude to the country’s future coming in at below economic growth. $50 per barrel.

The Who’s Who of the Global Energy Industry THE OIL & GAS YEAR | EQUATORIAL GUINEA 2015 DIPLOMACY & POLITICS

17 Friends and woes 19 A policy for the future Agustín MBA OKOMO Secretary-General MINISTRY OF MINES, INDUSTRY AND ENERGY 20 The open road César A. HINESTROSA GÓMEZ Director of Industry MINISTRY OF MINES, INDUSTRY AND ENERGY