Sierra Leone awards offshore oil blocks to Nigeria’s Marginal Energy

Sierra Leone has granted Nigeria-based Marginal Energy Limited rights to explore five offshore blocks as the government seeks to revive investor interest in its upstream sector, Reuters reported, citing a government statement.

The petroleum licence agreement covers blocks G-145, G-146, G-147, G-160 and G-161, spanning about 6,800 sq km. Signed through the Petroleum Directorate of Sierra Leone, the deal forms part of a broader effort by Freetown to attract exploration capital into a frontier basin that has seen limited activity in recent years. Marginal Energy has committed to conducting seismic surveys and drilling campaigns, with total exploration spending expected to exceed $225mn.

A central element of the agreement is the state’s participation structure. Sierra Leone will retain a 10% carried interest in oil projects and 5% in gas during both the exploration and development phases, allowing it to benefit from potential discoveries without upfront investment. Once production begins, the government will have the option to increase its stake by acquiring an additional paid interest of up to 9%.

The agreement was signed at the Invest in African Energy conference in Paris, where Sierra Leone has been promoting its offshore acreage to international investors. The move reflects a wider strategy to position the country as a destination for oil and gas exploration amid shifting investment patterns across the continent.

Although Sierra Leone has recorded offshore discoveries in the past, commercial production has yet to materialise. Authorities are seeking partnerships with regional independent companies such as Marginal Energy to advance exploration efforts and support the development of the country’s hydrocarbon resources.