Bowleven warns of complexity and financial constraints on the way to Etinde
Bowleven warned that the final investment decision (FID) for Etinde is expected at the end of 2022 but that it will have to raise financing.
In addition, the presence of the Russian Lukoil represents another uncertainty on the development plans.
Bowleven is the minority partner of the Etinde project, offshore Cameroon. The partners, led by New Age (African Global Energy), had considered national development plans. However, in December 2021, they decided that exports through Equatorial Guinea were the best way forward.
In order to develop the resource, the governments of both countries will therefore have to approve the plan. The partners are also expected to sign a contract with Marathon Oil and a gas sales agreement.
Bowleven warned that Marathon and the various joint ventures with facilities around the Punta Europa complex in Bioko were an added complexity.
Dealing with the wet gas supply would be of “particular importance”, Bowleven warned. The National Hydrocarbons Company (SNH) had previously requested a toll agreement, with Etinde’s partners retaining ownership of the product.
Another potential delay on the development of the project is Lukoil.
Bowleven said he was “still uncertain” how the Ukraine conflict might impact FID’s reach. Additionally, the Ukrainian crisis impacted the joint venture partners’ ability to coordinate discussions.
In the six months to the end of 2021, Bowleven posted a loss of $1.2 million. The company has about $2.5 million in cash, with another $2.5 million invested.
Although it has enough liquidity at the moment, the uncertainty surrounding the FID is a risk. If progress was slower than expected, Bowleven would need to raise funds to reach FID. At the announcement of the FID, its partners must pay 25 million dollars to Bowleven.
Company CEO Eli Chahin said progress in 2021 was significant. “The recent Ukraine crisis has had a negative impact on the pace of the new chapter of Etinde’s development, but we remain optimistic that all JV members are aligned to realize Etinde’s more economic development option. .”
Exports through Equatorial Guinea would involve a dry pipeline to the island of Bioko, which hosts processing and liquefaction facilities. Bowleven said he noted a similar Chevron plan for the YoYo and Yolanda finds.
Using existing facilities would reduce the time and cost of first production. The partners had previously considered an onshore treatment plant in Limbe but, with a high initial cost, this would have been more difficult.