Sierra Leone Secures $225 Million Offshore Petroleum Deal with Marginal Energy

The Government of Sierra Leone has finalized a major petroleum license agreement with Nigeria-based independent energy firm Marginal Energy Limited. Formally executed at the Invest in African Energy Forum in Paris, the landmark deal signals a renewed momentum to attract upstream investment and explore the nation’s largely under-explored frontier basin.

Commercial Terms and Block Allocation

Signed through the Petroleum Directorate of Sierra Leone (PDSL), the agreement grants Marginal Energy exclusive exploration, appraisal, and production rights across five strategic offshore blocks. The designated zones—G-Blocks 145, 146, 147, 160, and 161—cover a massive expansive area of approximately 6,800 square kilometers.

Under the finalized framework, the Nigerian independent firm has committed to investing more than $225 million across the exploration phases. The multi-phase agreement outlines a structured exploration window of up to seven years, which includes a strict minimum work program encompassing 3D seismic data acquisition, advanced geoscience studies, and exploratory drilling commitments.

Equity Structure and National Protections

The financial architecture of the license is designed to balance robust investor returns with substantial value creation for the host country. During the initial exploration and development phases, Sierra Leone will maintain a 10% carried interest in all oil projects alongside a 5% carried interest in gas projects, meaning the state faces no upfront funding obligations.

Once commercial production successfully commences, the state retains a strategic option to scale up its participating footprint by up to an additional 9% on a paid commercial basis. The fiscal regulatory guidelines also incorporate built-in royalty rates fixed at 10% for oil and 5% for gas, complemented by rigid provisions ensuring local content development, technology transfer, and rigorous environmental management standards.

Accelerating Energy Momentum in West Africa

President Julius Maada Bio welcomed the development, noting that the agreement mirrors the administration’s strategic focus on responsibly harnessing natural assets to power sustainable economic transformation. The deal marks a broader victory for the country’s restructured regulatory approach, directly following a major offshore reconnaissance permit signed with Shell plc and a previous exploration agreement with Eni S.p.A..

By partnering with an experienced operator from the Niger Delta, Sierra Leone aims to quickly turn raw geological data into commercial hydrocarbon discoveries. To maintain this high-level investment traction, the state is currently preparing a fresh offshore licensing round powered by newly updated sub-surface seismic mapping.