Marathon Oil Corp. (MRO) said on Thursday that the Equatorial Guinea Regional Mega Hub (GMH) parties have signed an agreement to proceed with the second and third phases of the project.
The heads of agreement were signed between the West African nation’s government, MRO subsidiary Marathon EG Holding Ltd. and the company Chevron Noble Energy EG Ltd., MRO said in a press release.
“We are excited about this critical milestone in the continued development of Punta Europa as a world-class hub for local and regional natural gas monetization,” said MRO President and CEO Lee Tillman.
GMH’s first phase, at Punta Europa in the Gulf of Guinea, began delivering gas in February 2021, from the Alen field, according to MRO. “Alen gas is processed under a combination toll and profit sharing agreement through Alba Plant LLC’s onshore liquefied petroleum gas (LPG) plant (MRO 52% interest) and the lation of LNG from Guinea Equatorial LNG Holdings Ltd (EG LNG, MRO 56% interest). ),” the U.S.-listed company said.
The second phase involves processing gas from the Alba unit, where MRO has 64 percent, starting next year. “Phase II will materially increase MRO’s exposure to global LNG prices and is expected to significantly improve EG Company’s earnings and cash flow,” MRO said.
The third phase is expected to process gas from the Aseng field.
“The Government of EG, represented by the Ministry of Mines and Hydrocarbons, has taken an active role in leading the successful implementation of this GMH expansion and is committed to ensuring that subsequent activities and negotiations progress in a timely manner” , the announcement said.
MRO also said it sees more opportunities for GMH from an oil and gas development agreement between Equatorial Guinea and Cameroon.
The pact signed on March 17 provides for “the exploitation of cross-border oil and gas fields,” a Cameroon presidential press release said. The treaty illustrates “the solidarity that aims to strengthen subregional integration”, he added.
MRO made capital gains of $613 million last year from its integrated gas operation in Equatorial Guinea, where it produced 55,000 net barrels of oil equivalent per day (boed) in the fourth quarter, according to its 2022 earnings report.
It had total net revenue of $3.612 billion in 2022 with total net production of 343 million boed. Of the total, 284 came from its US operations and the remaining 59 million from outside the US
MRO plans to spend $1.9 billion to $2 billion in capital spending this year, where it expects oil-equivalent production of “net 395,000 boed at the midpoint of guidance, including downtime associated with an EG change expected in the second quarter,” he said on February 15. report
“The combination of our high-quality US multi-basin portfolio and EG’s unique integrated gas business with growing global exposure to LNG leaves us well-positioned to deliver financial and operating results that compete not only with the best of our energy peers, but also with the top companies in the S&P 500,” Tillman said.
MRO was listed on the New York Stock Exchange on Thursday, when it announced the GMH expansion.
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