In a significant development, Houston-based VAALCO Energy has finalized a production sharing contract (PSC) for Block P offshore Equatorial Guinea.
This landmark deal, approved by the Equatorial Guinean government in March 2024, grants a 25-year development and production period.
Block P and the Venus Discovery
Block P, with a resource base exceeding 20 million barrels of oil, encompasses the Venus discovery and an exploration area.
VAALCO Energy operates the block with a 60% interest, alongside partners GEPetrol (20%) and Atlas Petroleum International (20%).
Production Timeline and Ambitious Growth Plans
VAALCO Energy is approaching a final investment decision for the offshore development, with plans to launch a drilling campaign shortly thereafter.
Commercial production from the Venus conventional oil field is anticipated to commence in 2026, with peak production projected for 2028.
The company is committed to maximizing Africa’s hydrocarbon potential and aims to double its crude oil production to over 50,000 barrels per day (bopd) by 2027.
This production increase aligns with VAALCO Energy’s strategy to enhance output from maturing fields.
Acquisition of Svenska Petroleum Exploration
In a strategic move to further bolster its crude resource exploitation, VAALCO Energy acquired Swedish offshore exploration company Svenska Petroleum Exploration in March 2024.
This $66.5 million all-cash transaction included the acquisition of Svenska’s 27.39% interest in the deepwater producing Baobab field in Block CI-40 offshore Ivory Coast.
Baobab Field: A Promising Asset
The Baobab field, boasting a 20-year production history and de-risked by 24 production wells and five injection wells, presents a significant upside opportunity for VAALCO Energy.
Portfolio Diversification and Production Boost
As part of its strategy to diversify its portfolio and increase production from African assets, VAALCO Energy is planning a dry-docking and upgrade of the Baobab field’s FPSO unit in 2025.
This is expected to drive substantial production growth from the field’s planned 2026 drilling program.
Exploration and Production Activities in Gabon
In addition to Equatorial Guinea and Ivory Coast, VAALCO Energy is actively exploring locations for its upcoming drilling campaign at the Etame block offshore Gabon, with operations slated to start in late 2024.
The company has already extracted 127 million barrels from its Etame permit and is dedicated to ensuring the block’s continued production over the next decade.
Optimizing Production at Etame
VAALCO Energy maintains a strong focus on achieving high production uptime and implementing enhancements at the Etame permit to minimize decline until the new drilling campaign commences.
Efforts are underway to optimize production from new flowline configurations for final processing before being pumped to the field’s FPSO.
Industry Recognition
NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC), commends VAALCO Energy’s commitment to bringing energy to where it’s most needed in Africa.
He highlights the company’s collaborative approach with its partners, combining financial resources with technical expertise to drive impactful exploration and production programs.
The AEC supports these efforts to harness Africa’s energy resources for the benefit of its people while transforming upstream markets into attractive investment destinations. Ayuk sees VAALCO Energy as a major contributor to the improvement of Africa’s upstream landscape.