Cameroon, Octavia Energy Sign Bolongo Deal With Exploration Commitments of Up to $41m

Cameroon signed a production sharing contract with Octavia Energy Corporation for the Bolongo offshore block, committing the company to an exploration program that could reach at least $41 million.

The contract was signed on August 14 at the headquarters of the National Hydrocarbons Corporation (SNH) in Yaounde, following the completion of negotiations earlier this month. It moves the 381.56-square-kilometre block into the exploration phase and sets terms covering State participation, taxation, local skills development and production sharing.

Under the minimum work program, Octavia will initially spend at least $1 million over three years on seismic data reprocessing and geological and geophysical studies. Depending on the results, the exploration authorization can be renewed twice for two-year periods, with each renewal carrying a commitment to drill an exploration well estimated at $20 million.

If both renewal periods are exercised, total minimum exploration commitments would reach $41 million.

The contract also sets out the economic terms governing any future production. Up to 70% of oil production and 80% of gas production can be allocated to cost recovery, while profits generated from hydrocarbon production will be subject to a standard tax rate of 35%.

SNH can take a maximum 25% participation in exploitation if a commercial discovery is made. Production bonuses payable to the State will range from $1 million to $3 million, depending on output thresholds. The remaining production will be shared between the contractor and the State under an R-ratio mechanism based on cumulative revenues and investments.

Bolongo lies in the Rio del Rey Basin, Cameroon’s historic oil-producing area. According to the government, existing seismic data and the block’s proximity to producing wells and infrastructure could support the search for new reserves.

Mines, Industry and Technological Development Minister Fuh Calistus Gentry said the contract forms part of government efforts to renew reserves and slow declining production from mature fields. He said the agreement also places requirements on the investor covering local content, employment and technology transfer.

“The signing of this contract is more than a legal act. It is the symbol of our shared ambition to make our hydrocarbons sector a driver of inclusive growth, skills transfer and sustainable development for the benefit of the entire nation,” Fuh Calistus said.

Under the contract, Octavia must allocate $150,000 annually to train Cameroonians during the exploration phase, rising to $250,000 annually during development and production.

The company has also committed to prioritizing Cameroonian workers and local suppliers. It said social investments will target areas including health, education and local livelihoods, while any gas discoveries will be supplied first to the domestic market for electricity generation, households and industries.

“The true measure of our investment is not only what is discovered beneath the ground, but what lasting value is created above it. We have not come to Cameroon for a season; we have come to stay,” Octavia Energy CEO Ahmed Nabil Hayel Saeed said.

The Bolongo agreement is the third petroleum contract concluded by Cameroon since the adoption of the 2019 Petroleum Code. SNH launched the licensing round covering nine blocks in August 2025, with Bolongo awarded to Octavia and four other blocks awarded to Murphy.

Mercy Fosoh