Equatorial Guinea Energy Outlook Suffers Double Whammy This Week

GUINEA (Capital Markets in Africa) – OPEC member Equatorial Guinea suffered a double blow this week to its ambition of revitalizing its energy industry.

The International Energy Agency said on Monday the West African nation’s crude production is on a “downward slope,” with capacity expected to drop 15 percent over the next six years to 110,000 barrels a day. That’s little more than a third of its peak output of 300,000 barrels a day in 2004.

Equatorial Guinea hopes the acquisition by Kosmos Energy Ltd. and Trident Energy Management Ltd. of fields operated by Hess Corp. will stem a decline in production after years of under-investment. Still, government plans to stimulate spending by exploration licensees such as Exxon Mobil Corp and Ophir Energy Plc took a blow on Wednesday.

Ophir said first output from its Fortuna liquefied natural gas project would be delayed until 2022, from the second half of 2020, as the company struggled to secure financing.

The project, with almost enough resources to meet the U.K.’s gas demands for a year, would position Equatorial Guinea as a “real LNG hub in West Africa with the ability to send supply in all directions,” Ophir Chief Executive Officer Nick Cooper said in an interview on Wednesday. While the country has been an LNG producer for more than a decade, Fortuna would become a “stepping stone into becoming a pivotal part of the LNG world, and therefore has a very high priority for the government,” he said.

Equatorial Guinea’s Energy Ministry didn’t immediately reply to a request for comment.

Source: Bloomberg Business News