Equatorial Guinea

Investment & Operational Criteria

Key Indicators

Risk Premia

4.750

%

Outlook

Neutral

Rating

CCC|4S|±

Ranking

75

Reserves (1P)

Total

mm boe

Oil

56

%

Summary

Corruption continues to provide headwinds for investment, but matters continue to improve. Recent activity for Panoro demonstrates that the onshore can compete with the offshore for investment, but it still remains challenging. Despite maintaining our Neutral Outlook, we believe that there has been an improvement in the environment, leading to a reduction in risk premia of 0.25%.

Updated

January 6, 2024

Country Basics

Region

Africa - Central

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

Equatorial GuineaEquatorial Guinea

Central Africa, bordering the Bight of Biafra, between Cameroon and Gabon.

Outline

Tax Regime
Type

PSC/PSA

Tax Regime
Notes

The main type of oil contract in Equatorial Guinea is a PSC. The contract is concluded either by international public invitation to tender in order to guarantee competition between the potential contractors or by direct adjudication. Each contract comes into force only after it has been ratified by the President of the Republic and on the date of the delivery to the contractor of a written notice of this ratification.

Investment & 
Operational
Climate

The investment climate in Equatorial Guinea reflects a lack of clear rules and regulations to establish and run a business, a lack of investment in critical infrastructure like power generation, and a lack of follow-through on high-level commitments to economic diversification or increased transparency. Additionally, ministers and ruling family members own important businesses and win many contracts. There have been instances in the past decades of government officials abusing their power or access to power to imprison or mistreat individuals with whom they have a business dispute. Though the government has communicated its intentions to foster private sector participation in its plan for economic diversification, no concrete steps were taken last year toward creating a sound enabling environment for foreign direct investment ("FDI"). While a requirement to partner with a local organization was removed five years ago, uncertainty still drives foreign investors to look for a local partner or guide to work through overwhelming bureaucracy in the public administration and unclear, informal requirements for registration and operation. Plans to establish an Investment Promotion Agency were not implemented during this period, even though it was listed as priority for the new Minister of Planning and Economic Diversification. In addition, major investments decisions are still being discussed at the presidential level with direct intervention from the vice president.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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