Canada-headquartered oil and gas player Zenith Energy has washed its hands of negotiations regarding a production sharing contract (PSC) for a block containing an oilfield offshore Benin in West Africa.
Zenith Energy was awarded a three-month exclusivity period in January 2023 to negotiate and finalise terms of a production sharing contract for Block 1, which encompasses the Sèmè oilfield offshore Benin in West Africa. Covering 551 km2 with over 355 km2 of recent 3D seismic data, Block-1, which was discovered in 1967 by Union Oil, is located in shallow water with onshore facilities and a tank farm for processing oil production.
The exclusivity for a period of three months came after the Canadian firm submitted an offer to Benin’s government on 15 September 2022 for the award of an initial nine-year licence to operate the block. Come April 2023, Zenith confirmed that it was performing the necessary legal and technical work in coordination with Benin’s Ministry of Water and Mines for the finalisation of the PSC for Block 1.
However, the Canadian player had a change of heart less than four months down the road, as it decided to discontinue negotiations with the Ministry of Water and Mines of the Republic of Benin for the finalisation of the PSC for Block 1, containing the Sèmè oilfield.
“The board has taken the decision following a comprehensive evaluation of recent geopolitical developments in the vicinity of Benin, the significant long-term investment required to successfully develop the Sèmè oilfield, and the material progress made in other jurisdictions where Zenith now intends to maximise its technical and financial resources with comparatively reduced risk for the company’s shareholders,” explained the firm.