Sierra Leone turns to Nigeria’s Marginal Energy in new offshore push

Agreement covers five offshore blocks as Sierra Leone seeks to diversify beyond mining and attract upstream investments

Sierra Leone is working to position itself as an exploration hub after signing a licence agreement with Nigerian independent Marginal Energy Ltd. for five offshore blocks.

The Petroleum Directorate awarded rights to blocks G‑145, G‑146, G‑147, G‑160 and G‑161, covering about 6,800 square kilometers, as part of efforts to develop its petroleum sector. 

The seven‑year licence allows Marginal Energy to conduct seismic surveys and exploratory drilling, with more than $225 million in planned investment.

President Julius Maada Bio, in a statement released by the Petroleum Directorate, said the agreement reflects the government’s commitment to “responsibly harnessing Sierra Leone’s natural resources for sustainable economic transformation,” adding that partnerships with capable investors will help accelerate development of the country’s petroleum sector.

Under the contract, Sierra Leone will hold a 10% carried interest in oil projects and 5% in gas during development, along with an option to increase its stake by 9% at first production.

The Sierra Leone offshore oil exploration deal was signed at the Invest in African Energy conference in Paris, where the West African country also finalized a reconnaissance agreement with Shell to conduct geological and geophysical surveys across 20,600 square kilometers. A similar pact was signed with Eni last October.

Sierra Leone, best known for its diamond production, is seeking to diversify an economy that relies on mining for about two‑thirds of export earnings. That dependence leaves fiscal balances exposed to commodity cycles, driving efforts to unlock upstream petroleum assets.

The agreement with Marginal Energy, with upstream activities in oil-producing Nigeria, forms part of Sierra Leone’s strategy to de‑risk its frontier basins. 

The country, which has yet to produce commercial oil, has been courting Nigerian independents for deep‑water exploration.

Innoson Oil & Gas already holds operatorship rights for shallow‑water block 2020a, while Famfa Oil secured six blocks in Sierra Leone’s fifth licensing round in 2023, as the government seeks to attract technical expertise and investment for deep‑water development.