Page 22: of Offshore Engineer Magazine (May/Jun 2026)

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MARKETS EXPLORATION commitments are low cost. is covered by these agreements will end up being formal fs-

Given that ~83% of the acreage has been traditionally cal agreements. Indeed historically, no MoUs in the region considered ultra-deep water (>1,500m*), where drilling is have resulted in formal contracts. But given the fact many very high cost, this low-cost early-stage opportunity screen- of the recent deals have been in countries with proven pro- ing is further evidence of the need for companies to maintain ducing potential, and even non-producing countries such rigid fscal discipline. Once studies are completed, the com- as Liberia, Sierra Leone and Guinea are being re-evaluated pany is in a good position to return to the regulator and ask as potential analogues to Guyana and Suriname, we are for a more formal deal for the acreage it considers the most confdent a sizeable amount of acreage will ultimately be prospective. Indeed, some of the MoUs and Agreement in converted to formal terms with drilling commitments.

Principles (AiPs) that have been signed, specifcally involve While Sub-Saharan Africa has been front and centre discussions regarding future fscal terms on the acreage. of MoUs and AiPs, other regions have also signed similar deals with Majors in the past few years. In the Middle East

Acreage by Water Depth:

North Africa (MENA) region, Egypt, Kuwait, Libya, Syria

Te Ultra-Deepwater Dominance and Turkey have all inked deals with Majors this year for

The trend is also part of an increasing desire for both exploration opportunities while Azerbaijan, Kazakhstan host countries and companies to conduct direct negotia- and Uzbekistan have led the way in the Caspian. In March tions rather than hold or enter formal licensing rounds. 2024, Malaysia signed Technical Evaluation Agreements

There are various advantages to this model. These include (like Reconnaissance Licences) with companies including quicker and more focused negotiation, less concern with bp, Eni and TotalEnergies. Other regions have continued rival bids, and mitigating the risk of awarding acreage to to favour more formal competitive bid processes.

less capable companies.

While the current wave of pre-licence activity across SSA 1 as at end May 2026, in early June, Petrobras signed is undoubtedly a positive signal for the continent's explora- PSCs for eight out of nine blocks offshore Cote d’Ivoire tion potential, investors and host governments should be it had formally declared an interest in in 2025 clear-eyed about what these instruments represent: they are options, not commitments. The real test will come over the * The defnition of ultra-deep water continues to evolve. next three to fve years, as these agreements either convert Historically, anything >1,500m has been considered ultra- into binding contracts with frm and tangible obligations deep but with technological improvements to the fore, many such as seismic acquisition or drilling, or quietly expire, operators now consider ultra-deep to start at 3,000m, with as the majority historically have. From our analysis, it is the nuance now less to do with absolute water depth and highly unlikely anything more than 25% of the acreage that more to do with whether a company can drill and develop.

22 OFFSHORE ENGINEER OEDIGITAL.COM