The Government of Sierra Leone has signed a Petroleum Licence Agreement (PLA) with Marginal Energy Limited for the exploration, development, and production of hydrocarbons in the country’s offshore basin.
The agreement, designated Petroleum Licence No. 002/26, was formalised on April 23, 2026, at the Invest in African Energy Conference 2026 in Paris, an event hosted by Energy Capital & Power. The signing marks a significant step in Sierra Leone’s efforts to position itself as an emerging destination for upstream oil and gas investment.
Under the terms of the agreement, Marginal Energy Limited has been granted exclusive rights to conduct petroleum operations across offshore G-Blocks 145, 146, 147, 160, and 161, covering approximately 6,800 square kilometres. The licence provides for a full-cycle upstream programme, including exploration, appraisal, development, and eventual production in line with international standards.
The agreement establishes a comprehensive fiscal and legal framework aimed at balancing investor incentives with national benefits. It includes an exploration period of up to seven years, structured in phases, alongside a minimum work programme featuring 3D seismic acquisition, advanced geoscience studies, and drilling commitments. The total minimum investment across the exploration phase is projected to exceed US$225 million.
Key fiscal provisions include a state carried interest of 10 percent for oil and 5 percent for gas during exploration and development, as well as royalty rates set at similar levels. The Government also retains the option to acquire an additional 9 percent participating interest on a paid basis during the production phase.
The agreement further incorporates provisions on local content development, environmental protection, technology transfer, and capacity building to ensure that petroleum activities contribute to broader economic growth and skills development.
Speaking on the development, Julius Maada Bio said the agreement reflects the government’s commitment to responsibly harnessing natural resources for sustainable economic transformation.
“This Agreement reflects our government’s unwavering commitment to responsibly harnessing Sierra Leone’s natural resources for sustainable economic transformation,” the President stated, adding that partnerships with credible investors will help accelerate the development of the petroleum sector while ensuring national benefits.
The Director General of the Petroleum Directorate of Sierra Leone, Foday B. L. Mansaray, described the agreement as a major step in unlocking the country’s offshore potential, emphasising transparency, competitiveness, and technical excellence in resource management.
On behalf of the company, Executive Director John Emefienim expressed optimism about the partnership, noting that Marginal Energy is committed to maintaining high standards of safety, environmental stewardship, and regulatory compliance throughout its operations.
Marginal Energy Limited, a Nigeria-based independent energy firm, brings nearly two decades of experience in upstream petroleum operations, particularly in the Niger Delta and other emerging markets. The company is expected to leverage its technical and financial capacity to advance exploration activities and support Sierra Leone’s ambition to move towards active drilling and production.
The agreement is subject to ratification by Parliament in accordance with Sierra Leone’s legal and constitutional requirements.
The signing forms part of a broader national strategy to revitalise upstream petroleum exploration, supported by recent advances in seismic data acquisition and basin analysis. With growing industry interest and improved geological understanding, Sierra Leone continues to position itself as a frontier destination for oil and gas investment.
The Government also acknowledged the support of key partners, including the African Energy Chamber, Energy Capital & Power, TGS, GeoPartners, and Africa Energy Partners, for their contributions to investment promotion and technical collaboration.
The Petroleum Directorate of Sierra Leone remains the principal government agency responsible for regulating and managing the country’s petroleum resources, ensuring that all upstream and midstream activities are conducted transparently and in the national interest.
