US player makes a move on Swedish energy firm to enrich its offshore oil portfolio in Africa

Home Fossil Energy US player makes a move on Swedish energy firm to enrich its offshore oil portfolio in Africa

February 28, 2024,
by

Melisa Cavcic

Another merger is on the cards for Houston-based Vaalco Energy, as the U.S. company is currently in talks with the owner of Sweden’s Svenska Petroleum Exploration to bring the firm into the fold and take over its main asset, which is an oil-rich offshore block in Côte d’Ivoire, West Africa.

FPSO Baobab Ivoirien MV10; Source: Svenska

Vaalco Energy has confirmed the rumors that it is engaged in discussions with the owner of Svenska Petroleum Exploration regarding a possible debt-free corporate transaction to acquire the Swedish player whose primary asset is a 27.39% interest in Block CI-40 offshore Côte d’Ivoire.

This block is operated by Canadian Natural Resources International (CNR) with a 57.61% stake while Petroci holds the remaining 15% interest. Svenska has a production net working interest of approximately 4,500 barrels of oil equivalent per day in this asset, covering the Baobab field, which came online in August 2005.

At the time, production started from ten horizontal wells aided by three water injectors while the produced fluids were co-mingled and transported via flow lines to an FPSO moored in over 900 meters of water depth. The FPSO Baobab Ivoirien MV10, owned and operated by MODEC, can process 70,000 barrels of oil per day, 75 million cubic feet of natural gas, and 100,000 bpd of water injection.

“There can be no assurance that a definitive agreement for the possible acquisition will be entered into or, if a definitive agreement is entered into, that the possible acquisition will proceed to completion,” highlighted the U.S. player.

Furthermore, Vaalco explains that if this acquisition proceeds, it is expected to be funded by cash on hand and will be subject to several customary closing conditions, including regulatory and government approvals.

The potential acquisition of Svenska comes after the merger with TransGlobe, which enabled Vaalco to boost its portfolio, allowing it to have assets in Egypt, Gabon, Equatorial Guinea, and Canada.

The U.S. firm received approval in September 2022 for its plan of development (POD) for a discovery located in Block P in Equatorial Guinea.