Eni’s new agreement is an oil and gas exploration, development, and production license for Block A1, an area offshore from The Gambia. Eni and the government of The Gambia hope this agreement will help develop the nation’s oil and gas industry and create jobs.
With the signing of this agreement, Eni has entered into the upstream oil-and-gas sector in The Gambia for the first time. Eni hopes that this agreement represents an opportunity to explore new frontiers for oil and gas discoveries within geographical areas where Eni has not previously held permits or had significant oil or gas discoveries.
Block A1 includes approximately 1,300 square kilometers of surface area and ranges in water depth from approximately 1,250 to 3,300 meters. As a result, a high degree of technical expertise and a longer-term commitment of financial capital will be needed to conduct successful exploration within this area. The addition of Block A1 to Eni’s geographic portfolio meets Eni’s objective of developing and expanding a globally diversified portfolio of oil and natural gas investments in the world’s oil-producing and developing countries.
Eni’s Block A1 is not just a blank space on a map; it is located along the Atlantic Margin, a geological corridor that has seen increased focus from the hydrocarbon industry due to numerous hydrocarbon discoveries across the larger region. Recently released by Eni in their press release, the location of Block A1 is adjacent to areas along the Atlantic Margin that have already been demonstrated to be prolific producers of hydrocarbons. The site is complemented by the MSGBC Basin, which has established itself as a valid hydrocarbon-producing basin, with major milestones such as Senegal’s Sangomar oil production and the Greater Tortue Ahmeyim gas project, which is shared between Senegal and Mauritania. Explorers can find significant opportunities for upside due to the combination of established geological evidence and unexplored land.
The signing of the Block A1 agreement between the Gambian government and Eni has implications for The Gambia that extend beyond pure geology and hydrocarbon potential. In 2021, the Gambian Petroleum Commission was formed with a mandate to regulate both upstream and midstream petroleum operations. The Gambia has been actively pursuing a viable, international, credible operator to work on their oceanic resource potential for several years now. Although the presence of Eni in The Gambia does not mean a discovery will happen in the very short term, it does demonstrate to both the international investment community and potential upstream operators that The Gambia’s regulatory and commercial offering has reached the point where a major international supermajor, like Eni, operating in deep water offshore, has made a business decision to enter the Gambia’s petroleum resource sector.
The narrative of Block A1 has its own cautionary tale. It’s a frequently traded block that previous operators have left without having drilled a well because of the challenges associated with exploration in such an undeveloped area. Eni’s involvement redefines the definition of successful operatorship in the frontier energy space: a belief that a differently interpreted, more rigorous assessment of the data and longer-term investment philosophy will yield value from an investment traditionally viewed as uncertain. In the frontier energy industry, the typical beginnings of a new significant story are not usually characterized by a phenomenal discovery of hydrocarbons; rather, they begin with an outstandingly analytical decision to explore once again.
