Sierra Leone has awarded offshore oil and gas exploration rights to Nigeria’s Marginal Energy in a deal valued at more than US$225 million, as the country steps up efforts to unlock its hydrocarbon potential and attract foreign investment into its upstream sector.
The licence, granted by the Petroleum Directorate Sierra Leone, covers five offshore blocks spanning approximately 6,800 square kilometres. The agreement commits the Nigerian firm to undertake seismic surveys and exploratory drilling, key early-stage activities aimed at determining the commercial viability of oil and gas reserves.
Officials described the deal as one of the most significant recent investments in Sierra Leone’s energy sector, which has remained largely underdeveloped despite indications of offshore hydrocarbon potential.
Under the terms of the agreement, the government will retain a 10 percent carried interest in oil operations and 5% in gas. It also holds the option to increase its stake by up to 9% at the production stage, a provision aimed at boosting state revenues should commercially viable reserves be discovered.
President Julius Maada Bio said the agreement reflects the government’s commitment to responsible resource development while ensuring that the country derives tangible economic benefits.
He added that the deal aligns with broader national priorities to diversify the economy, create jobs and strengthen domestic revenue mobilisation.
The agreement was signed on the sidelines of an international energy forum in Paris, where Sierra Leone has been actively promoting its offshore basin to global investors.
The signing comes shortly after the government granted a reconnaissance permit to Shell, covering 19 offshore blocks. That earlier arrangement focused on preliminary data acquisition and basin analysis, forming part of a wider strategy to improve geological understanding and de-risk future investments.
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With the addition of the Marginal Energy deal, Sierra Leone has now allocated a total of 24 offshore blocks at the Paris forum, signalling renewed investor interest in its largely untapped offshore resources.
Authorities say these developments are laying the groundwork for a broader licensing round expected to be supported by newly acquired seismic data, which is considered crucial for attracting major international oil companies.
The government has in recent years sought to reform its regulatory and fiscal frameworks in order to make the sector more competitive and transparent. Officials believe that clearer rules, combined with improved data availability, will help position Sierra Leone as an emerging destination for upstream investment in West Africa.
Industry analysts note that while the country is still at an early exploration stage, its offshore geology shares similarities with proven hydrocarbon systems along the West African margin, raising cautious optimism about its long-term prospects.
However, they also warn that exploration remains inherently risky and capital-intensive, with no guarantee of commercial discovery.
If successful, the development of an oil and gas industry could provide a significant boost to Sierra Leone’s economy, which is currently reliant on mining and agriculture. Revenues from hydrocarbons could support infrastructure development, social services and broader economic diversification.
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At the same time, experts stress the importance of strong governance and environmental safeguards to ensure that resource development is sustainable and benefits the wider population.
The government has said it is committed to adhering to international best practices in the management of natural resources, including transparency in licensing and revenue allocation.
While it may take several years before any production begins, officials say the latest agreements mark a critical step in advancing Sierra Leone’s ambition to become a player in the regional energy landscape.
For now, the focus remains on exploration and data gathering, as the country seeks to turn geological promise into tangible economic gains.
