Chevron's entry into Guinea-Bissau marks a turning point for the small coastal state, which currently does not produce hydrocarbons, and fully integrates it into the burgeoning exploration activity along the MSGBC basin, now one of West Africa's emerging energy hubs.

Chevron Corp., the second-largest U.S. oil company after ExxonMobil, announced Monday it has entered offshore exploration in Guinea-Bissau, securing two permits in the MSGBC Basin, which spans Mauritania to Guinea.

Chevron’s local subsidiary will hold a 90% operating interest in blocks 5B and 6B, with Petroguin, the national oil company, holding the remaining 10%. The deal has received all necessary regulatory approvals.

The two permits, Carapau and Peixe Espada, will be operated by Chevron. Béatrice Bienvenu, Chevron’s Country Manager for West Africa, said the company welcomes the new partnership with Petroguin and the government of Guinea-Bissau. The move is part of Chevron’s global exploration strategy to expand its portfolio with high-potential assets. Already a producer in Angola and Nigeria, Chevron said it has increased its exploration portfolio by nearly 40% over the past two years, adding new acreage in Peru, Uruguay, and Namibia.

Chevron’s entry follows a wave of new projects across Africa. In Equatorial Guinea, the company finalized a deal in September to develop associated gas from the Aseng field, an investment valued at $690 million. In Nigeria, it continues deepwater oil exploration, notably in the Agbami and Usan fields. In Namibia, Chevron holds an 80% interest in permits PEL 82 and PEL 90, located in the Walvis and Orange basins.

The stakes are high for Guinea-Bissau, which does not yet produce hydrocarbons but has stepped up efforts over the past two years to attract foreign investment in offshore exploration. Before the Chevron deal, Bissau-Guinean authorities reached an agreement in principle with Italy’s Eni in May 2023 to assess the country’s oil and gas potential. President Umaro Sissoco Embaló also said he wanted closer cooperation with Russia’s Lukoil in July 2023. However, U.S. sanctions have since led Lukoil to sell its international assets, including those in Africa, effectively ending any prospects for projects in Guinea-Bissau.

No operational timeline or technical program has yet been released for the Carapau and Peixe Espada blocks. According to data reported by Ecofin Agency in 2023, roughly 498 million barrels of prospective resources were identified in some Bissau-Guinean coastal blocks by Australia’s Far Ltd before the company exited the country in 2022.

Louis-Nino Kansoun