Exploration Licenses up on Auction

Cameroon is auctioning off exploration licences for three offshore and two onshore oil blocks, an official at the country’s state oil company said on Tuesday. The central African state is trying to reverse a decline in crude oil production, which averaged just over 70,000 barrels per day in 2012 from a 1977 peak of 185,000 bpd. “We believe and are hopeful that these (blocks) will significantly raise production,” said Simon Tamfu, National Hydrocarbons Corporation’s exploration manager. He said the blocks were put up for auction in January and that companies had until mid-June to submit their proposals. He declined to say which companies had so far expressed interest. The blocks include the shallow water Lungahe, Bomana, and Dissoni leases in the Rio del Rey Basin – near existing producing fields – as well as the Kombe-Nsepe and Manyu leases onshore, Tamfu said.

The two onshore blocks are covered by protected forests, including the Douala-Edea Wildlife Reserve and the Ejagham Forest Reserve, and would be classified as “special operations zones” requiring more stringent regulation. He said winning bidders would be required to pay the government a $3 million signature bonus, and adhere to a production sharing contract outlining mining drilling requirements, taxes and payments on eventual output. Existing oil producers in Cameroon include UK firm Bowleven, independent French producer Perenco, and Chinese-controlled Addax Petroleum. Rolake Akinola, an analyst at Ecobank, said the new blocks were likely to attract significant interest from oil companies. “They provide access to a mature oil province with high prospects,” she said in a research note.

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