Equatorial Guinea is preparing for the sale of new oil blocks after the successful signing and approval of eight new production-sharing contracts (PSCs).

Details about the sale, set for later this year, are expected to be unveiled during the EG Gas Conference from June 12-13 in the nation’s capital of Malabo, where Gabriel Mbaga Obiang Lima, the country’s minister of mines, industry, and energy, confirmed he will make “vital announcements.”

Already, exploration has intensified as new discoveries are being made. The latest was announced May 20 when PA Resources said the Carla South (1-7) exploration well in Block 1 offshore Equatorial Guinea encountered approximately 12 m (39 ft) of net oil pay in good-quality sandstones. The sidetrack reached a total measured depth of 3,600 m (11,811 ft).

The discovery extended the proven Carla trend from Block 0 into Block 1, PA Resources CEO Bo Askvik said in a news release. “Further analysis of the data will be required to assess the implications of the well and next steps on this trend.”

Given the heightened activity and considering several oil blocks were awarded between 2010 and 2012 with another sale planned, oil officials in Malabo expect oil production to jump by more than 100,000 b/d within two to three years.

The Ministry of Mines, Industry, and Energy announced in a release dated April 10, 2013, the ratification of the eight PCSs, originally signed in December 2012. Operators of the eight oil blocks include Murphy Equatorial Guinea Oil (Block W off Rio Muni), Xuan Energy (Block Y), Royal Energy (Block Z offshore Bioko Island), and Glencore Exploration (Block EG-05 offshore Bioko Island).

Blocks EG-01 to EG-04 onshore and offshore Rio Muni will be operated by G3 Oleo e Gas, Pan Atlantic Oil and Gas, and Elegance Power, respectively, the ministry stated.

All the contracts have the state-owned GEPetrol as a partner.

“Ratification of the eight PSCs offshore Bioko Islands, offshore Rio Muni, and onshore Rio Muni signed in December 2012 reflects the current aggressive policy of the ministry in licensing blocks for exploration of the Equatorial Guinea offshore and onshore,” Lima said in the release.

The ministry intends to acquire 3-D seismic data for blocks F-13/G-13, 1-13/1-14, and 1-15/1-16 in the coming months. “These blocks will be offered to the international petroleum industry later in the year once the 3-D seismic has been acquired and processed,” Lima said.

Looking at the companies that signed the PSCs, a mix of well known oil companies and smaller, less known from West Africa, Brazil, and China, it is evident that Equatorial Guinea is welcoming new investors to its hydrocarbon sector, an oil expert in Lagos, Nigeria, said.

Although the main foreign investors in Equatorial Guinea are US companies – ExxonMobil, Hess, and Marathon – European and Chinese companies are starting to play a role in the country’s oil and gas sector, which is expected to expand, he added.

Prior to signing the eight new PSCs, Equatorial Guinea had in June 2012 signed a memorandum of understanding (MOU) regarding Blocks J-14, J-15, K-14, and K-15, offshore Rio Muni. The MOU was signed between the ministry, Murphy Worldwide Inc. (operator), Vanco Oil and Gas, Dana Petroleum (E&P), and GEPetrol.

Following the signature of the MOU, a single PSC contract will be negotiated for the four blocks, the ministry said.

Equatorial Guinea’s current oil reserves are estimated at 1.1 Bbbl. Oil officials in Malabo said the Zafiro field continues to be the single largest source of the country’s output. However, field production has been declining. Production peaked at 278,000 b/d in 2004, and dropped to about 240,000 b/d in 2006. ExxonMobil reported crude oil production from the Zafiro field on Block B decreased by about 15% in 2011 compared to 2010.

But Equatorial Guinea officials expect the declining output to rise, driven by new production from the Aseng oil and gas field in Block 1, offshore Bioko Island, which lies at a water depth of 945 m (3,100 ft). Noble Energy saw first oil from the Aseng field Nov. 20, 2011, and the oil production quickly ramped up to 60,000 b/d since startup in November, the company said.

New oil production is expected in 2013 from the US $1.6 billion Alen gas-condensate field, which lies in Block 0 and is being developed by Noble Energy, Lima said.

The Alen field, located in the Douala basin, is expected to have an initial output of about 37,000 b/d, according to the US Energy and Information Administration (EIA). The field extends from Block O (95%) to the northern part of Block I (5%).

New projects are expected to offset dwindling oil production from the Zafiro, Ceiba, Okume, and Alba fields, the EIA said.