Sierra Leone has signed a $225 million offshore oil exploration and production agreement with Nigeria-based Marginal Energy Limited, marking a major step in its efforts to revive its petroleum sector.
The agreement was sealed on Thursday at the Invest in African Energy conference in Paris, where Sierra Leone has been actively promoting its offshore licensing opportunities to attract global investors.
The deal was signed through the Petroleum Directorate of Sierra Leone and covers offshore blocks G-145, G-146, G-147, G-160 and G-161, spanning about 6,800 square kilometres of largely underexplored basin territory.
President Julius Maada Bio said the agreement reflects his country’s determination to unlock its petroleum potential while ensuring long-term benefits for citizens.
Under the arrangement, Marginal Energy has committed to an extensive seismic survey and drilling programme, with total exploration spending projected to exceed $225 million.
The investment is expected to generate new geological data and identify commercially viable oil and gas reserves in Sierra Leone’s offshore basin, which authorities are positioning as a frontier energy destination.
The fiscal structure of the deal includes state participation, with Sierra Leone retaining a 10 per cent carried interest in oil projects and 5 per cent in gas during exploration and development phases.
This means the government will not bear upfront exploration costs. It will also have the option to acquire an additional 9 per cent participating interest on a paid basis once production begins, potentially increasing its stake in successful discoveries.
Sierra Leone has long pursued oil production ambitions, but progress has been limited since early exploration efforts in the 1980s first identified offshore hydrocarbon potential.
In recent years, the government has intensified efforts to attract investors by updating regulatory frameworks and commissioning new seismic studies to better assess its offshore reserves.
The latest deal adds to a growing wave of interest from international energy firms. On April 22, Shell signed an agreement with Sierra Leone for offshore exploration, just months after Italy’s Eni entered a similar arrangement.
The development also highlights a broader trend of Nigerian indigenous oil companies expanding across Africa.
Companies such as Oando Plc have expanded operations beyond Nigeria, with interests in countries including Angola, Ghana, and Côte d’Ivoire as part of regional growth strategies.
Industry analysts say the growing number of cross-border oil deals signals renewed confidence in West Africa’s offshore potential, though exploration risks remain high given the frontier nature of the basins involved.
