Perenco inks deal with New Age to take over Etinde permit operatorship

June 8, 2022, by Melisa Čavčić

Anglo-French oil and gas player Perenco has inked a deal with New Age (African Global Energy) Limited to buy its stake and take over the operatorship of a field offshore Cameroon, which is expected to boost the development of African gas exports to Europe amid the widespread energy security concerns due to the current geopolitical crisis.

Bowleven, an Africa-focused oil and gas E&P company, revealed on Tuesday that New Age had signed a definitive conditional agreement with a subsidiary of Perenco to transfer all of its participating interests in the Etinde permit, and operatorship of the Etinde JV, to Perenco.

This transaction is subject to a number of approvals, including the customary regulatory approvals by the Cameroon government and the approval of the Etinde JV partners. Moreover, under the terms of the joint operating agreement, both Lukoil and Bowleven have a 30-day right of pre-emption over New Age’s interest.

Bowleven will continue to be entitled to a final investment decision (FID) payment of $25 million regardless of this transaction from its Etinde JV partners which, following completion, would include Perenco.

Eli Chahin, Bowleven CEO, commented: “The prospect of Perenco becoming our partner and operator at the Etinde permit is very positive news. We believe that Perenco’s proven Cameroon oil and gas developments and substantial experience provides an opportunity to accelerate our efforts to secure FID and the associated $25 million payment to Bowleven. We look forward to engaging with Perenco and we will update shareholders in relation to Etinde developments in due course.”

In a separate statement on Wednesday, the African Energy Chamber expressed its support of Perenco’s definitive deal to buy New Age’s participating interests in the Etinde conventional gas development, located in shallow waters, offshore Cameroon.

After the definitive conditional agreement was signed for the transfer of New Age’s participating interest in the permit, as well as operatorship of the Etinde JV for an undisclosed amount, the organisation said that Perenco’s relationship with the west-central African country of Cameroon was expected to make significant headway while giving much-needed momentum to the long-stalled gas-condensate project, which slowed down in recent years.

As Perenco already operates a number of projects in Cameroon, Gabon, and the Republic of Congo, the African Energy Chamber believes the company is well-positioned to take advantage of the enormous prospect presented by the field, as well as from surrounding fields and is expected to move quickly towards the monetisation of gas to be used domestically, regionally, and for export to transcontinental markets such as Europe.

This ambition comes on the heels of the geopolitical crisis due to Russia’s attack on Ukraine, which has left Europe in “dire need of new, committed gas partners, giving new life to Africa’s ambitions to become a leading player in future the oil and gas economy.” The European Union (EU) is currently looking into ending its reliance on Russian fossil fuels, planning to ban almost 90 per cent of Russian oil imports by the end of the year.

Perenco – thanks to its Kribi floating liquefied natural gas project serving as its prized asset in the country – already operates in the Rio del Rey and Douala basins, with production in 2021 averaging approximately 100,000 barrels of oil equivalent per day.

NJ Ayuk, Executive Chairman of the African Energy Chamber, remarked: “We strongly welcome the change of operatorship in the Etinde field, Perenco is a tried, true and tested operator and has shown operational excellence in the country. We hope that Perenco, a company that knows the region very well, will be able to fast-track the development of the Etinde field, as well as the field’s surrounding prospects.”

Located in the shallow waters of the Rio del Rey Basin, offshore Cameroon, the Etinde project is currently operated by New Age with a 37.5 per cent stake, while other development partners are Lukoil with a 37.5 per cent, and Bowleven with the remaining 25 per cent.

“We look very much forward to seeing Perenco expedite the prospects for local, African gas development, as well as the development of gas for export markets, particularly to Europe,” concluded Ayuk.