JOHANNESBURG—South Africa, February 17, 2022/ — With over 1.1 billion barrels of oil reserves and 1.5 trillion cubic feet of natural gas, the small but formidable nation of Equatorial Guinea is ambitious in its plans to position itself as a leading African hydrocarbon hub.
In an exclusive interview with the African Energy Chamber (www.EnergyChamber.org), H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea, provided updates on the country’s oil industry and how the government is driving natural gas growth and development.
What needs to be done to position Africa as a competitive gas economy?
That answer is very simple – infrastructure to import and export gas. I always give the same example of how we supply LNG to South Africa, to Morocco, and to Ghana. Whenever I go to those countries, I find that even if I forced a company to send LNG cargo, they could not receive the cargo. There is not a port or terminal in Morocco, South Africa, or Ghana that is able to receive the ship.
Infrastructure is going to be critical. Investors in Europe may be selling solutions to be able to put as many terminals as possible, which will allow us to export gas to them. That is what we need in order to be competitive in gas.
How will the European Union’s recent decision to label certain gas projects as green impact gas-producing states such as Equatorial Guinea?
I think it is very good. Equatorial Guinea has an ambitious project called the Gas Mega Hub of Equatorial Guinea. The vision for the hub is to create Equatorial Guinea as a hub to receive gas, not only from Equatorial Guinea but also from Cameroon and Nigeria. All of that gas is a way to give back to those countries. All of that development requires investments.
As the country which is creating the project, we need investors. Those investors will not only be Africans, but they will also be American, Asian, and Europeans because they have a lot of experience. If those Europeans have a lot of restrictions when it comes to investing in gas, there will be problems. A lot of those Europeans will be very interested in participating when they see what we are doing.
Regarding the Gas Mega Hub, how is the reception from the neighboring countries like Nigeria and Cameroon, who are trying to get offshore gas, seen from this project’s initiative?
The only thing I am targeting is non-committed gas and the far initiative for the long term. That is why the NNPC and the private owners of that gas are very happy. They see that there is a good reception and that we are very clear that we are not there to challenge Nigeria LNG. The same thing happened in Cameroon. When you go to Cameroon you talk to them and understand.
The beauty of the gas mega-hub is that when you send your gas it is transformed into LNG so you can get the amount you need for power, but if you don’t need it for the power, you can take it for private investors and make money from it. The owners of the gas are always being paid. There is no loss.
We have been waiting to hear about the Zafiro field and its development. Can you give us an update and how the government plans to manage it? How will it increase production and efficiency?
When it comes to Zafiro, we are not going to reinvent the wheel or do something that has never been done. The Zafiro has been done in Malaysia, Norway, Venezuela, and many other places.
The only thing we need to do is to study the options. Nobody is going to come to buy an asset that they need to give back to me in two years. The asset transfer is the solution, but we need to do it correctly.
Can you give an update on the status of the new effort to build the refinery?
The refinery has different issues. The first is the feedstock. The second issue is financing the infrastructure, which is no problem because we can come up with the money or partners. The last issue is the commercial viability to make sure that the project is going to make money. If we did that project one or two years ago, it would make sense.
Right now, we have a situation where the oil price is high and there is not a sense that the oil price is going to lower. Right now, doing a small-scale petrochemical or small-scale refinery would still be a big challenge in order to make a commercial effect. We are working on the commercial part. The entire project is ready, and we can kick it off at any moment, but I need to be convinced that the commercial aspect is right.
There have been rumors that you have signed an agreement with an American company to develop the Fortuna FLNG project, can you expand on this and when can we expect more details?
Regarding Fortuna, it is a project that a lot of people know about in terms of the huge discovery in gas and oil. We have been working with a company to be able to present a plan of development in that field. We have had very good advances. We need to make sure that we have an exploration partner that not only will develop Fortuna but will keep drilling to develop more gas and oil in the region.
That part is pending. We are hoping to close it by the end of this year. When we do, we will announce it. Regarding your comments about the U.S. company, it is correct. That is as much as I can say.
What is Equatorial Guinea’s position when it comes to renewables and topics such as energy transition and climate change?
Like I always say, the transition needs to happen everywhere. Every country needs to do it, including Equatorial Guinea. We need to put together the technology that is right for the country. Country to country there is some technology that makes sense and other technology that doesn’t make sense.
For example, one of the technologies that I am open to for Equatorial Guinea is hydrogen. We can bring hydrogen to see how we can tap the opportunities of hydrogen with our other installations. We need to think about not just investing in that technology but also to ensure that we have a market for it.
What deals do you expect to be signed in African Energy Week 2022?
I am very convinced that gas projects are going to be signed there. I am preparing and working very hard. Oil projects will be very challenging because the majority of the licensing round is going to be next year. I will not be surprised. Gas projects are going to be critical and asset transfers are going to be my talk at Africa Energy Week. I will talk about what I have done in regard to asset transfers and what we are going to do.