Ophir Energy said that the Equatorial Guinea Ministry of Mines and Hydrocarbons will not be extending the license of the offshore Block R, where the company proposed to develop the $2bn Fortuna FLNG project.
The license of Block R expired on 31 December 2018 leaving the UK-based Ophir Energy to book an impairment charge of around $300m.
Ophir Energy interim chief executive Alan Booth said: “It is disappointing that the Ministry has decided not to extend the licence, despite the amount of effort and cost dedicated to the delivery of the project and especially as we were still talking to highly credible potential co-investors.
“Nevertheless, we will continue to work constructively with the authorities in Equatorial Guinea. I should like to thank everyone in the Ophir project team; you gave this your very best endeavours.”
Located about 140km west of Bioko Island, the Fortuna FLNG project was to see development of six commercial discoveries in a phased manner.
In November 2016, the British oil and gas company created a joint operating company with OneLNG to develop the floating liquefied natural gas (FLNG) project at the Fortuna gas discovery.
OneLNG was a joint venture created between Golar LNG Partners and Schlumberger. In May 2018, Schlumberger quit the joint venture due to financial delays faced by the Fortuna FLNG project, which was planned to enter into production in the first quarter of 2020.
At that time of Schlumberger’s exit, Golar LNG Partners said that it expects to work with Ophir Energy on the proposed offshore gas project. The two firms said that they were engaged actively in senior level discussions with various counterparties over a financing solution for the Fortuna FLNG project.
Recently, Indonesian oil company Medco Energi entered into talks with Ophir Energy to acquire the latter.
In September 2018, Ophir Energy had completed the acquisition of certain production and exploration assets of Australia-based Santos in Southeast Asia for $205m. The acquired assets had about 13,500boepd of net working interest production in 2018 and have close to 21.2mmboe in net working interest reserves.
The producing assets are located in Vietnam and Indonesia while the exploration and appraisal assets are in Malaysia, Vietnam and Bangladesh.