China’s Fuhai Energy has acquired a significant stake in the Barracuda offshore gas project in Equatorial Guinea, a move that underscores the country’s push to revive upstream investment as oil and gas production continues to decline.
Under a farm-out agreement, Fuhai has taken a 40 percent interest in the EG-08 block, operated by Britain’s Antler Global, Europa Oil & Gas (Holdings) said. Financial terms were not disclosed.
As part of the deal, Fuhai will shoulder the bulk of exploration risk, funding up to 95 percent of the costs of the first exploration well, capped at US$53 million. Antler Global, which retains a 40 percent stake in the production sharing contract (PSC), will fund the remaining 5 percent.
Equatorial Guinea’s state-owned oil company GEPetrol holds a carried 20 percent interest in the block, while London-listed Europa Oil & Gas owns 42.9 percent of Antler Global.
The agreement grants Fuhai priority cost recovery in the event of a commercial discovery, in line with the PSC terms, Europa said.
The EG-08 licence covers around 731 square kilometres in the Douala Basin offshore Equatorial Guinea, in relatively shallow waters of about 80 metres. The Barracuda prospect is the most advanced of several gas targets identified within the block using 3D seismic data.
Prospective resources across the block are estimated at just over 2 trillion cubic feet of gas equivalent, with approximately 893 billion cubic feet attributed to Barracuda alone, subject to confirmation by drilling.
If successful, the project could benefit from its proximity to existing offshore infrastructure operated by Chevron, potentially lowering development costs and accelerating any future tie-back for processing and export.
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The entry of Fuhai Energy a relatively new but fast-expanding Chinese upstream player comes at a critical time for Equatorial Guinea’s hydrocarbons sector. Once one of sub-Saharan Africa’s largest oil producers, the country has seen output fall sharply over the past decade as mature fields decline and new investment slows.
According to OPEC data, Equatorial Guinea’s crude oil production dropped to around 55,000 barrels per day in 2023, down from about 241,000 bpd in 2010, largely due to natural decline at ageing offshore fields.
Gas has increasingly been identified as a potential stabilising force for the sector, both to support existing liquefied natural gas (LNG) infrastructure and to supply domestic power and industrial demand.
Authorities have stepped up efforts to attract new players, offering fiscal incentives and promoting untapped acreage. The Barracuda transaction aligns with these efforts, bringing in a partner willing to finance high-risk exploration at a time when many international companies remain cautious.
The government plans to launch a new oil and gas licensing round between April and November 2026, offering 24 offshore and onshore blocks, as part of a broader strategy to reverse declining production and extend the life of its hydrocarbons industry.
For China, the deal adds to a growing footprint in Africa’s energy sector, where Chinese firms have increasingly combined infrastructure financing with upstream investments to secure long-term resource access.
For Equatorial Guinea, officials hope that deals like Barracuda will help unlock stranded gas resources, support LNG utilisation and generate fresh revenue at a time when public finances remain under pressure.
Exploration drilling at Barracuda is expected to be a key test of the Douala Basin’s remaining gas potential. A commercial discovery could pave the way for further appraisal and development, while also strengthening investor confidence ahead of the 2026 licensing round.
Whether the renewed interest will be enough to offset years of decline remains uncertain, but for now, Malabo is betting that fresh capital and new partners can help reinvigorate one of Africa’s smallest but once most lucrative oil and gas producers.
