Kosmos Energy Sao Tome and Principe (Kosmos) has gained operatorship of Block 5 and 12, offshore West Africa in the exclusive economic zone (EEZ) of the Democratic Republic of Sao Tome and Principe (STP), as part of a farm-in (65%) agreement with Equator Exploration, a 81.5% held subsidiary of Oando Energy Resources.
Prior to the Kosmos’ farm-in, Equator executed, on 19 February 2016, a production sharing contract (PSC) with the National Petroleum Agency of STP (ANP-STP) for Block 12, taking an 87.5% participating interest with ANP-STP holding the remaining 12.5% as a carried interest.
The Block 5 farm-out transaction was approved by ANP-STP on 19 February 2016 and the Block 12 farm-out transaction was approved on 31 March 2016.
Prior to the Block 5 farm-out transaction, Equator held an 85% participating interest in the PSC for Block 5, with ANP-STP holding the remaining 15% as a carried interest. The PSC for Block 5 was signed in April 2012 and a 3D seismic survey of 1480sq km was acquired in April 2015.
After completion of both farm-outs, Kosmos, Equator, and ANP-STP will have 65%, 20%, and 15% interest, respectively, in Block 5 and 65%, 22.5%, and 12.5% interest, respectively, in Block 12.
Block 5 has an area of 2844sq km in water depths ranging from 2000-2500m. It was ranked highest in the EEZ by Equator with regard to hydrocarbon potential based on water depth, proximity to both the Equatorial Guinea shelf and the ancient Ogouee delta, and the presence of structural development related to basement faulting in the Cretaceous where oil has been found in Equatorial Guinea.
Block 12 has an area of 7940sq km in water depths ranging from 2500-3000m, situated within Zone B of the government block classification scheme. Within this group, Block 12 has been ranked the most attractive by Equator due to its proximity to the North Gabon salt basin and the presence of structural prospects located both on the footwall of the Ascension Fault and similar sub-parallel trends.