(Bloomberg) -- Equatorial Guinea, OPEC’s smallest producer, plans to boost oil and gas output following the exit of Exxon Mobil Corp. from the Central African nation earlier this year, according to its oil minister.
Crude production in Equatorial Guinea has dropped by half over the last five years from as much as 140,000 barrels a day to 70,000 barrels in August, according to data compiled by Bloomberg. Exxon left the country earlier this year, transferring assets to state-owned company GEPetrol.
“Our national oil company will be moving into a new stage of production and exploration, that shall include the important redevelopment of the Zafiro Field,” Equatorial Guinea’s Minister of Hydrocarbons and Mineral Development Antonio Oburu Ondo said in a statement on Monday.
Zafiro was Exxon’s key asset, producing more than 1 billion barrels of oil over a period of more than 20 years. The field had been pumping about 45,000 barrels a day before it was shut in 2022 due to a safety incident.
Equatorial Guinea has bolstered the work of its national oil company with a $350 million contract award to Petrofac Ltd. in April. It also plans to rely on other producers operating in the country including Chevron Corp, Marathon Oil and Kosmos Energy Ltd. to raise output. It recently held talks with oil trader Trafigura Group over financing.
Chevron paid $1.15 billion in taxes and shared oil production to Equatorial Guinea in 2023, more than all US counterparts, according to SEC filings compiled by Bloomberg. Marathon Oil paid $230 million, Exxon $189 million and Kosmos $145 million to the government.
The Zafiro redevelopment will start in 2025 and involve three phases within the year, Ondo said. Equatorial Guinea is also focusing on expanding an offshore Gas Mega Hub, which produces liquefied natural gas and methanol, with some feedstock coming by pipeline from Nigeria.
Reductions this year in corporate income taxes and dividend taxes are part of the government’s efforts to draw investment, Ondo said.
©2024 Bloomberg L.P.
