The Chinese company Fuhai Energy has agreed to acquire a 40% stake in the offshore Block EG-08 in Equatorial Guinea, a project with significant gas potential. The deal, signed with Antler Global Ltd, a company associated with Europe Oil & Gas Holdings PLC, marks a major investment in the country's energy sector. The block, located in the Douala basin, is estimated to hold over 2.2 trillion cubic feet of gas.
Fuhai Energy will finance 95% of the drilling and testing costs of the Barracuda well, up to $53 million, while Antler Global will assume the remaining 5%. The well, located in waters approximately 80 meters deep, is estimated to hold 893 billion cubic feet of gas. The block, which covers an area of 731 km², is close to existing infrastructure operated by Chevron, which could facilitate future gas evacuation and processing.
The agreement will see the shareholding structure of the production-sharing contract change, with Fuhai Energy holding 40%, Antler Global Ltd holding 40%, and Guinea Ecuatorial de Petróleos (GEPetrol) holding 20%. Europe Oil & Gas will maintain an indirect 42.9% stake in Antler Global, allowing it to retain significant exposure to the project while reducing its financial risk.
The deal is subject to approval from the Ministry of Mines and Hydrocarbons of Equatorial Guinea and investment authorization from the Shandong provincial government in China. The parties expect to obtain these approvals in the coming months, with the aim of starting drilling in 2026. This year is expected to be crucial for the project's development.
The investment by Fuhai Energy strengthens energy cooperation between Equatorial Guinea and China, as the African country prepares for a new round of oil and gas licensing. The country is offering 24 blocks to attract international capital and revitalize offshore and onshore exploration. Equatorial Guinea's crude oil production declined to 55,000 barrels per day in 2023, down from 241,000 barrels per day in 2010.
Fuhai Group New Energy Holding Co Ltd, a major Chinese conglomerate, has integrated activities in upstream and downstream oil, gas, and petrochemicals. The company ranked among China's top 500 enterprises and reported revenues of over $12.7 billion in 2024, making it a significant partner for strategic projects in Central Africa.
The CEO of Europe Oil & Gas, William Holland, described the deal as a "significant milestone," highlighting that it will enable rapid progress in developing the Barracuda field. He emphasized that 2026 will be a key year for the company and the project in Equatorial Guinea.
Key points
- Fuhai Energy acquires 40% stake in Block EG-08.
- The company will finance 95% of Barracuda well drilling costs.
- The project aims to start drilling in 2026.
