Seychelles, the island nation east of Africa, will invite oil and gas companies to bid for exploration blocks after a two-year break from exploration, according to Reuters. Regulators have also reviewed and updated rules surrounding energy exploration bidding, which the companies vying for oil and gas blocks will have to abide by.
The source said East Africa has become famous for exploration due to oil discoveries in Uganda and Kenya as well as natural gas findings in Tanzania and Mozambique.
"We want bona fide explorers to invest in Seychelles and drill wells to test our petroleum potential rather than speculate and sit on an area for their own commercial purposes," said President James Alix Michel.
Companies can bid for areas of about 3.81 square miles. Seychelles' Exclusive Economic Zone includes a total of nearly 502,000 square miles. New licensing rules grant companies exploration areas on a first-come, first-served basis while other companies have up to 90 days to submit a bid for the same area, Reuters reported.
Companies previously approached the country for exploration acreage but Seychelles was unable to grant requests before the new legislation was finalized. The new licensing rules will require companies to pay 10 percent of petroleum revenues as a royalty, according to the source.