The West Africa-focused independent oil and gas exploration company African Petroleum has announced that it will drop its production sharing contracts (PSC) in Liberia after failing to extend its production sharing contracts for offshore blocks LB-08 and LB-09
The news came just as ExxonMobil announced it started drilling its first well targeting reserves off the coast of Liberia. Exxon's Liberian affiliate is working on developing the Mesurado-1 exploration located about 50 miles off the coast of Liberia, whose drilling had been delayed in 2014.
Since the African Petroleum’s PSCs formally expired in June 2016, the company was in talks with the Liberian authorities over a possible extension but failed to reach an agreement. The failure to reach an agreement with the Liberian government reduces the company’s recognised prospective resources to US$7.4bn net unrisked mean prospective oil resources. The company commented that it had sought partners on the PSCs, but there was little interest as a result of the challenging market conditions for exploration activity and the lack of commercial discoveries in Liberia.
“African Petroleum has been active in Liberia for some time and has played a major role in helping to progress the industry in the country through the successful drilling of three exploration wells, including the non-commercial discovery at Narina-1,” said CEO Jens Pace.
“It is therefore disappointing to be exiting the country; however, our near term focus and resources must go towards the other more exciting assets within our portfolio that are generating the most industry interest and lie within proven hydrocarbon systems adjacent to world class commercial discoveries.”