Sierra Leone has signed a $225 million petroleum licence agreement with Nigeria-based Marginal Energy Limited, granting the firm rights to explore and develop offshore oil blocks as the country intensifies efforts to attract investment into its underdeveloped energy sector.
According to a report by Reuters, the agreement was concluded through the Petroleum Directorate of Sierra Leone (PDSL) and covers five offshore blocks—G-145, G-146, G-147, G-160 and G-161—spanning about 6,800 square kilometres.
The deal signals a renewed push by the West African nation to reposition its oil and gas industry, which has struggled to attract sustained exploration activity despite earlier discoveries in its offshore basin.
Details of the terms of the agreement
Under the terms of the agreement, Marginal Energy is expected to undertake seismic surveys and drilling activities, with total exploration spending projected to exceed $225 million.
The government will retain a 10% carried interest in oil projects and a 5% stake in gas during the exploration and development phases. It also holds an option to increase its participation by up to 9% on a paid basis once production begins.
Officials say this structure is designed to balance investor incentives with long-term national benefits, ensuring that the state maintains a meaningful stake in any commercial discoveries.
President Julius Maada Bio, SSierra Leone leader, described the agreement as part of a broader strategy to harness the country’s petroleum resources for economic growth.
He said the deal reflects a commitment to “developing our petroleum resources in a manner that delivers tangible benefits to our people.”
Licensing drive and investor outreach
The agreement was signed on the sidelines of the Invest in African Energy conference in Paris, where Sierra Leone has been actively promoting its offshore potential to global investors.
Authorities are also preparing a new offshore licensing round backed by fresh seismic data, aimed at reducing geological uncertainty and improving investor confidence in what remains a frontier basin.
Foday Mansaray, Director General of the Petroleum Directorate, has previously said the country’s strategy focuses on attracting credible international players while building a strong technical understanding of its offshore resources.
The latest deal follows similar efforts by several African countries seeking to revitalise exploration amid heightened global interest in new hydrocarbon supplies, driven in part by energy market disruptions linked to tensions in the Middle East.
Context of regional competition for oil investment
Across Africa, governments are increasingly competing for upstream investment as oil majors and independents look to replenish reserves and diversify supply sources.
Countries such as Namibia, Gabon and Angola have recently recorded fresh exploration activity or launched new licensing rounds, raising the stakes for frontier producers like Sierra Leone.
For Sierra Leone, the challenge remains translating early-stage agreements into actual drilling and eventual production. While the basin is considered prospective, it has yet to deliver large-scale commercial output.
Still, officials see partnerships with firms like Marginal Energy as a step toward unlocking that potential and integrating the country into the wider West African oil landscape.
