• China’s Fuhai Energy buys 40% stake in Equatorial Guinea gas block

• Fuhai to fund most exploration costs at Barracuda prospect

• Deal supports investment push as Equatorial Guinea output declines

China’s Fuhai Energy has acquired a stake in the Barracuda gas project offshore Equatorial Guinea, partner Europa Oil & Gas (Holdings) said on Tuesday, Dec. 30. Fuhai entered the EG-08 block under a farm-out agreement with Britain’s Antler Global, the block’s operator, acquiring a 40% interest in the production sharing contract (PSC).

Financial terms of the transaction were not disclosed. Under the deal, Fuhai will fund up to 95% of the costs of the first exploration well, capped at $53 million, while Antler, which retains a 40% interest in the PSC, will cover the remaining 5%.

State oil company GEPetrol holds a carried 20% interest in the PSC. Europa Oil & Gas owns a 42.9% stake in Antler Global. The agreement provides Fuhai with priority in cost recovery in the event of a commercial discovery, in line with the PSC terms.

The EG-08 block covers about 731 square kilometres in the Douala basin offshore Equatorial Guinea, in water depths of around 80 metres. The Barracuda prospect is the most advanced of several gas structures identified by 3D seismic data.

Prospective resources for the block are estimated at just over 2 trillion cubic feet of gas equivalent, with about 893 billion cubic feet attributed to the Barracuda prospect, subject to confirmation by exploration drilling.

The project is located near existing infrastructure operated by Chevron, which could facilitate the transport and processing of hydrocarbons if a commercial discovery is made. The deal comes as Equatorial Guinea prepares to launch a new oil and gas licensing round from April to November 2026, offering 24 blocks.

The country is seeking to attract new investment and revive offshore and onshore exploration as output declines. According to OPEC, Equatorial Guinea’s crude oil production fell to 55,000 barrels per day in 2023 from 241,000 bpd in 2010 due to natural decline at several mature fields.

Abdel-Latif Boureima