Equatorial Guinea has granted oil and gas companies a two-year extension for exploration work, the Ministry of Mines and Hydrocarbons has said.
Expressing concern about the impact of lower oil prices and coronavirus, Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima said the country had an “obligation to make bold, decisive, and pragmatic policy decisions to get the industry moving again”.
The steps were part of the government’s plan to “safeguard our local oil and gas industry, its companies and its employees. The granting of these extensions has been deemed suitable to create an enabling environment for international and African companies to keep investing in Equatorial Guinea and ensure a quick recovery of our industry.”
Obiang Lima had set out plans last week raising the possibility of reducing the burden on companies and noting the need for quick action.
The ministry went on to say it intended to ensure when things recovered, there would be gains for local content. Boosting local capacity and education would reduce costs for international companies, it said, while creating more local value.
The Equatorial Guinea move comes as the African Energy Chamber and the IAGC issued a call for African governments to take steps to ensure stability in the oil and gas sector.
Various steps were suggested, including waiving taxes on service companies for six months, providing no interest loans, extending geophysical data confidentiality periods, halving fees paid for local training and ensuring backing for midstream projects.
The African Energy Chamber’s executive chairman NJ Ayuk said that some states had already adopted proposals but “we call for everyone to continue doing more. Our American friends from the IAGC have been a strong and steadfast ally in helping us make a case for Africa and its energy sector.”
The chamber has also recently called on the Bank of Central African States (BEAC) to relax currency controls, which were adopted in June 2019. The rules were intended to promote transparency and ensure cash stayed within local economies.
However, these rules have “created a very unattractive environment for foreign investors seeking to invest in CFA union states”.
These controls are slowing transactions and preventing investors from repatriating proceeds from investments.