Sierra Leone has signed a $225 million offshore oil exploration and production agreement with Nigeria-based Marginal Energy Limited, as the country steps up efforts to revive its upstream petroleum sector.
The agreement was signed on Thursday at the Invest in African Energy conference in Paris, where Sierra Leone has been actively promoting its offshore licensing opportunities to attract investors.
Marginal Energy Limited is a Nigerian independent oil and gas company focused on upstream exploration and production, particularly in marginal fields, and is part of a growing group of indigenous firms expanding beyond Nigeria’s borders.
What they are saying
Speaking on the deal, Sierra Leone’s President, Julius Maada Bio, said the agreement reflects the country’s commitment to unlocking its petroleum potential while ensuring benefits for its citizens.
- The licence, executed through the Petroleum Directorate of Sierra Leone, covers offshore blocks G-145, G-146, G-147, G-160 and G-161, spanning about 6,800 square kilometres.
These blocks form part of Sierra Leone’s largely underexplored offshore basin, which the government is now repositioning as a frontier destination for oil and gas investment.
- Under the agreement, Marginal Energy has committed to an extensive seismic survey and drilling programme, with exploration spending expected to exceed $225 million — a significant investment aimed at generating fresh geological data and identifying commercially viable reserves.
- The fiscal structure of the deal also ensures state participation. Sierra Leone will retain a 10% carried interest in oil projects and 5% in gas during the exploration and development phases, meaning the government does not bear upfront costs.
In addition, the country has the option to acquire up to an extra 9% participating interest on a paid basis once production begins, allowing it to increase its stake if discoveries prove commercially successful.
Get up to speed
Sierra Leone has long sought to establish itself as an oil-producing nation, but progress has been slow despite early exploration campaigns in the 1980s that identified offshore hydrocarbon potential.
In recent years, however, the government has renewed efforts to attract investment into its offshore basin by updating regulatory frameworks and commissioning new seismic data to improve the understanding of its reserves.
This renewed push appears to be gaining traction. On April 22, Shell signed an agreement with Sierra Leone to explore oil and gas in its offshore basin, coming just five months after Italy’s Eni entered a similar deal.
What you should know
The deal also reflects a broader trend of Nigerian indigenous oil companies expanding their footprint across Africa.
For instance, Oando has extended its operations beyond Nigeria, establishing a presence in Angola while exploring opportunities in Ghana and Ivory Coast as part of its regional growth strategy.
- Nairametrics recently reported that Oando, which recorded an average production of just over 32,000 barrels of oil equivalent per day in 2025, is planning to raise up to $750 million to fund a major drilling campaign aimed at increasing its output by as much as 300%.
- This wave of expansion is not limited to upstream oil. On Thursday, April 23, Aliko Dangote disclosed plans to build a new oil refinery in Tanzania identical to his flagship facility in Lagos.
