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Equatorial
Guinea: Energy profile. Equatorial Guinea’s economy has grown
rapidly since the country began exporting oil in 1995.
Equatorial Guinea
has experienced rapid economic growth due to the
discovery of large offshore oil reserves, and has
become Sub-Saharan Africa’s third largest oil
exporter after Nigeria and Angola.
According to the World Bank, oil revenues increased
in value from $3 million in 1993 to $190 million in
2000 to $3.3 billion in 2006. From 2002 to 2006 the
country experienced an average real annual GDP
growth of 15.8 percent. Oil exports currently
represent over 90 percent of total export earnings.
However, a slowdown in oil production has caused GDP
growth to decelerate to 6.8 percent in 2007.
Equatorial Guinea is a sub-Saharan African country
consisting of a mainland area (Rio Muni province)
and a series of islands. The country’s capital,
Malabo, is located on Bioko Island, approximately 25
miles off the coast of Cameroon.
According to the Oil and Gas Journal, Equatorial
Guinea had estimated proved oil reserves of 1.1
billion barrels as of January 2007. The majority of
these reserves are located offshore in the oil-rich
Gulf of Guinea. Since the 1995 discovery of the
Zafiro field, Equatorial Guinea's oil production has
increased dramatically. In 1995, oil production was
5,000 barrels per day (bbl/d), which increased to
385,970 b/d in 2006. While there has been some
discussion of capping oil production in order to
extend the life of the fields and prevent economic
instability, the government appears reluctant to
implement any measures that would slow development.
Equatorial Guinea’s director-general for Mines, Industry
and Energy said that he expected the country’s oil
production capacity to increase to 570,000 bbl/d in
2007, while EIA believes these estimates are too
optimistic and expects production to rise to about
420,000 bbl/d.
Section Organization
The Ministry of Mines, Industry and Energy is the
overall regulatory body for the petroleum industry in
Equatorial Guinea. The Equatoguinean government created
a national oil company (GEPetrol) that became
operational in 2002.
GEPetrol’s primary focus is to manage the interest
stakes of the Equatoguinean government in various
production sharing contracts (PSAs) and joint ventures (JVs)
with foreign oil companies. The company can also
participate in oil exploration and production activities
outside Equatorial Guinea.
In recent years, the government has passed legislation
to increase local participation (ownership) to a minimum
of 35 percent in foreign investments. In the hydrocarbon
sector, this requirement can be met with a 35 percent
share allotted to the national oil company, GEPetrol. As
a result, the national oil and gas companies (Sonagas)
are expected to play a more substantive role in oil and
gas development.
Production
Zafiro Field
In 1995, ExxonMobil and Ocean Energy discovered the
Zafiro field, which is located northwest of Bioko
Island. Zafiro was the first deepwater field to be
brought on stream in West Africa and is currently the
main producing field in Equatorial Guinea. Zafiro is
currently operated by an ExxonMobil-led consortium that
includes Devon Louisiana and GEPetrol. According to the
Energy Intelligence Group (EIG) the field contains
estimated recoverable reserves of over 400 million
barrels, and is Equatorial Guinea's largest oil producer,
with an output of 245,000 bbl/d for the first half of
2006.
Zafiro, as of 2005, has been blended with Topacio and
marketed as “New Zafiro”, a low-sulfur distillate rich
crude oil. Zafiro was traditionally sold across the US,
Europe and Asia-Pacific markets, but recently China has
emerged as its single most important purchaser, buying
over half its export volumes.
Other Fields
Ceiba, Equatorial Guinea's second major producing oil
field, is located just offshore of Rio Muni in
exploration Block G. The field contains an estimated 113
million barrels of reserves and began production in
December 2000. Production has been below expectations.
In 2005, around 40,000 bbl/d of oil was produced after a
program of water injection to repressurize the reservoir.
The field is operated by Amerada Hess, with partners
Tullow Oil and GEPetrol.
Alba, Equatorial Guinea's third largest field is located
12 miles north of Bioko Island. According to the EIG,
Alba is a major condensate field containing an estimated
400 million barrels of liquids. The field currently
produces between 65,000 and 75,000 bbl/d of condensates
and 20,000 bbl/d of liquefied petroleum gas (LPG).
Marathon Oil Corporation serves as operator of Alba
field along with GEPetrol.
Additional production could come from Amerada Hess’
Northern Block G field, expected to come on stream at
the end of 2007. According to EIG, initial production is
expected to be around 60,000 bbl/d.
Exploration and Field Development
In 2005, the Equatoguinean government planned to begin a
new licensing round for offshore acreage, including
parts of Blocks F, G, H and L in the Rio Muni Basin.
After several delays, the licensing round went ahead in
September 2007. Blocks were awarded to India’s Oil and
Natural Gas Corporation, the Nigerian National Petroleum
Corporation, and other independent producers. Prior to
the licensing round, PetroSA, the South African state
oil company was allocated three blocks for the country’s
role in preventing a coup attempt against the government
of Equatorial Guinea in 2004.
Asian firms from China, India and the Philippines are
especially interested in gaining exploration rights. In
February 2006, the China National Offshore Oil Company
(CNOOC) signed a production sharing agreement (PSA) for
offshore acreage in Equatoguinean waters. Under the
contract, CNOOC and GEPetrol will have the rights to
explore the acreage over the next five years.
Downstream
As a result of poverty and lack of infrastructure,
national oil consumption is limited. Domestic petroleum
consumption for 2006 was estimated at 1,044 bbl/d,
primarily in the form of motor fuel. Getotal, jointly
owned by Total and the government of Equatorial Guinea,
has a monopoly on the distribution of petroleum products,
all of which are imported due to a lack of refining
capacity.
The Luba oil port became operational in 2002. It is
located next to the town of Luba on the west side of
Bioko Island. The Equatoguinean government hopes that
offshore oil and gas companies will use the Luba port as
their transportation hub. In addition, a new oil port in
Malabo is currently being constructed to relieve
congestion at the main terminal. Oil companies located
on the Island of Bioko are expected to use the port once
it is completed. Pils (Netherlands) will operate the
port for 15 years, after which the Equatoguinean
government will become its operator.
Natural Gas
Equatorial Guinea’s natural gas production continues to
increase. According to the OGJ, Equatorial Guinea had
1.3 trillion cubic feet (Tcf) of proven natural gas
reserves as of January 1, 2007. The majority of the
reserves are located offshore Bioko Island, primarily in
the Alba and Zafiro associated natural gas fields. From
2001 - 2006, Equatoguinean natural gas production
increased rapidly from 1 billion cubic feet (Bcf) to 46
Bcf as new projects came online. The country is
currently marketing itself as a regional gas industry
hub based on the recent completion of an LNG facility on
Bioko Island and plans for its expansion.
Sector Organization
Following a decree signed by President Obiang in January
2005, the government announced the creation of a state
natural gas company, Sociedad Nacional de Gas de Guinea
Ecuatorial (Sonagas, G.E.). The responsibilities of
Sonagas include managing gas assets and developing an
industrial and residential natural gas market, as well
as the treatment, distribution, marketing, and
exportation of natural gas reserves. As is the case with
oil companies, the government requires a minimum local
participation of 35 percent in all foreign investments
which can be substituted by allotting shares to the
state companies.
Exploration and Production
Natural gas production in Equatorial Guinea has expanded
rapidly in the last five years in response to new
investments by major stakeholders in the Alba field.Alba,
the country's largest natural gas field, contains 1.3
trillion cubic feet Tcf of proven reserves, with
probable reserves estimated at 4.4 Tcf or more.
Throughout the 1990s, oil companies primarily produced
condensate and flared the associated natural gas.
Currently, the Alba field produces around 250 million
cubic feet per day (MMcf/d) of wet natural gas. Marathon
Oil (operator) has a 63 percent interest in the field,
while Noble Energy holds 34 percent interest and
GEPetrol has the remaining three percent.
In October 2005, Noble Energy made a natural gas
discovery in Block O. The company is currently deciding
whether or not to drill additional exploration wells on
the block. Noble Energy holds a 45 percent interest in
Block O and is joined with partners GEPetrol (30
percent) and Glencore Exploration (25 percent).
Liquefied Natural Gas (LNG)
Marathon Oil Corporation and its partners completed
Train 1 of the $1.4 billion Punta Europa LNG facility on
Bioko Island in May 2007. The plant is expected to
process approximately 3 trillion cubic feet of dry gas
from the Marathon-operated Alba Field. The plant’s
initial output was delivered under an agreement with BG
Gas Marketing LTD to supply 3.4 million metric tons of
LNG per year for 17 years. BG, in turn, is expected to
supply the majority of the LNG to the U.S. terminal at
Lake Charles, Louisiana but the company has distribution
flexibility in determining where the LNG will be
delivered.
Marathon is planning a second LNG train as Equatorial
Guinea finalizes arrangements to process stranded gas
from Cameroon and Nigeria. Agreements have already been
signed with Cameroon, which is believed to have
sufficient gas reserves to supply a minimum of 200 MMcf/d
of gas by 2010 and Nigeria who will supply 600-800 MMcf/d.
Additional LNG potential exists as Equatorial Guinea
implements its policy to end gas flaring.
Electricity
Equatorial Guinean’s electricity generation is
unreliable due to aging equipment. On both Bioko Island
and the mainland, electricity is generated by a
combination of thermal and hydroelectric plants. The
country’s total electricity generation and consumption
in 2005 was 0.03 billion kilowatthours (Bkwh).
Sector Organization
Equatorial Guinea’s electricity sector is owned and
operated by the state-run monopoly, Sociedad de
Electricidad de Guinea Ecuatorial S.A. (SEGESA). SEGESA
operates the country's two small electricity
transmission networks, which comprise approximately 80
miles of high tension lines. The network on the mainland
serves the suburban area of Bata, while the second,
older distribution system on Bioko Island connects
Malabo to the port of Luba. The government has plans to
expand this grid by 2010. SEGESA's power supply is
unreliable due to aging equipment—consumers often
experience prolonged blackouts. Small diesel and
gasoline powered generators are widely used as a back-up
source of power supply. The Equatoguinean government has
attempted to privatize SEGESA in an effort to increase
competition and efficiency in the electricity sector;
however, foreign companies have shown little interest in
the state company.
The expansion of natural gas production at the Alba
field in recent years has provided a convenient fuel
source for new power generation in the country. The
10.4-MW, natural gas-fired Punta Europa plant began
operation in 1999, supplying electricity to Bioko
Island. After upgrades in 2000, the potential total
capacity of Punta Europa rose to 28 MW, yet output
remains constrained by the original capacity of the
outgoing transmission line. An additional 4-6 MW of
generation capacity is currently under construction at
the Atlantic Methanol Production Company (AMPCO) complex
on Bioko Island.
Energy Overview
Proven Oil Reserves (1/1/07 – Oil & Gas Journal) 1.1
billion barrels
Oil Production (2006E) 386 thousand barrels per day
Oil Consumption (2006E) 1,044 barrels per day
Net Oil Exports (2006) 354 thousand barrels per day
Proven Natural Gas Reserves (January 1, 2007E)-O&G
Journal 1.3 trillion cubic feet
Natural Gas Production (2006E) 45.9 billion cubic feet
Natural Gas Consumption (2006E) 46 billion cubic feet
Electricity Installed Capacity (2005) 0.013 million
kilowatts
Electricity Generation (2005E) 28 million kilowatthours
Electricity Consumption (2005E) 30 million kilowatthours
Total Per Capita Energy Consumption (2004) 12.1 million
Btus
Environmental Overview
Energy-Related Carbon Dioxide Emissions (2005) 4.87
million metric tons
Per-Capita, Energy-Related Carbon Dioxide Emissions
(2004) 7.4 metric tons
Environmental Issues tap water is not potable;
deforestation
Major Environmental Agreements party to: Biodiversity,
Climate Change, Climate Change-Kyoto Protocol,
Desertification, Endangered Species, Hazardous Wastes,
Law of the Sea, Ship Pollution signed, but not ratified:
none of the selected agreements
Oil and Gas Industry
Organization GE Petrol; Sonagas (national oil and gas
companies)
Major Oil/Gas Ports Luba Port, second port (Malabo)
under construction
Major Oil Fields Zafiro (270,000 bbl/d), Ceiba (45,000
bbl/d), Alba (65,000 bbl/d of condensates)
Major Natural Gas Fields Alba
* The total energy consumption statistic includes
petroleum, dry natural gas, coal, net hydro, nuclear,
geothermal, solar, wind, wood and waste electric power.
The renewable energy consumption statistic is based on
International Energy Agency (IEA) data and includes
hydropower, solar, wind, tide, geothermal, solid biomass
and animal products, biomass gas and liquids, industrial
and municipal wastes. Sectoral shares of energy
consumption and carbon emissions are also based on IEA
data.
**GDP figures from OECD estimates based on purchasing
power parity (PPP) exchange rates.
