Nigeria's independent oil sector has spent three decades building expertise inside the Niger Delta. One of its firms has just taken that expertise to a new frontier and signed one of Sierra Leone's most significant upstream commitments in years to prove it.
Sierra Leone has signed a $225 million offshore oil exploration and production agreement with Nigeria-based Marginal Energy Limited, as the country steps up efforts to revive its upstream petroleum sector. The agreement was signed at the Invest in African Energy Conference in Paris, where Sierra Leone has been actively promoting its offshore licensing opportunities to attract investors.
The licence, signed through the Petroleum Directorate of Sierra Leone, covers offshore blocks G-145, G-146, G-147, G-160, and G-161, spanning about 6,800 square kilometres. Marginal Energy has committed to a seismic and drilling programme with exploration spending expected to exceed $225 million. The programme provides for up to seven years of exploration work, including seismic surveys and drilling.
The fiscal architecture of the deal is structured to ensure Sierra Leone participates in any upside without bearing upfront risk. The Sierra Leonean government will retain a 10% carried interest in oil developments and a 5% stake in gas projects during both the exploration and development phases. The state will also have the right to acquire an additional participating interest of up to 9% on a paid basis once commercial production commences.
Sierra Leone's President Julius Maada Bio described the deal as part of a wider strategy. He said it was designed to convert untapped natural resources into long-term national revenue streams while ensuring state participation in potential discoveries. Foday Mansaray, Director General of the Petroleum Directorate of Sierra Leone, described the agreement as a step toward unlocking the sector's potential.
The deal lands at a moment when Sierra Leone's offshore basin is attracting rare back-to-back attention from international players. On April 22, Shell signed an agreement with Sierra Leone to explore oil and gas in its offshore basin, coming just five months after Italy's Eni entered a similar deal. Marginal Energy's arrival adds a third major commitment within twelve months.
The Marginal Energy deal also reflects a broader and accelerating trend. Nigerian indigenous oil companies are expanding their footprint across Africa, with Oando having established a presence in Angola while exploring opportunities in Ghana and Côte d'Ivoire, and Aliko Dangote separately disclosing plans to build a new oil refinery in Tanzania.
If successful, the programme could position Sierra Leone alongside recent West African oil success stories such as Ghana, Senegal, and Côte d'Ivoire, where deepwater discoveries have reshaped national export profiles. Sierra Leone currently has no commercial oil production. The 6,800 square kilometres now under licence to a Nigerian independent represents its most credible attempt yet to change that.
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