Benin Sm Field Oil Production: 2026 First Oil Marks Positive Milestone

Benin Sm Field Oil Production is scheduled to begin in January 2026, marking a long-awaited offshore milestone for Rex International and the Government of Benin. The upstream breakthrough aligns with rising investor interest in West Africa’s oil frontiers, despite short-term liquidity pressures at Lime Petroleum.

First Oil Expected in January 2026

Akrake Petroleum Benin S.A., an indirect subsidiary of Rex International, confirmed plans to commence production from the Sm Field in offshore Block 1 by late January 2026. First oil will follow completion of the AK-2H horizontal production well in the main H6 reservoir.

Drilling on the H6 interval begins in the week of 12 January 2026, positioning Benin among West Africa’s emerging offshore producers alongside Ghana, Côte d’Ivoire, and Angola.

MOPU and FSO Units Already on Station

The project is supported by the Stella Energy 1 mobile offshore production unit (MOPU) and the Kristina floating storage and offloading (FSO) vessel, both upgraded and mobilised to location.

The drilling programme includes:

• AK-1P exploration well (H7–H8 data)
• AK-1H horizontal producer (H6)
• AK-2H horizontal producer (H6)

Exploration results are expected to refine the long-term reservoir model for Block 1.

Subsurface Challenges Add Delays

The drilling campaign encountered unstable shale sections in the overburden, triggering stuck-pipe incidents and requiring redrilling. These technical challenges prolonged operations and contributed to near-term cost overruns.

New geomechanical data allowed the drilling team to mitigate further complications and successfully progress AK-2H to target depth.

Forward Development and Reservoir Strategy

Once AK-2H is onstream, the current rig contract ends. Rex International plans to bring a new jack-up unit later in 2026 for a follow-up development campaign.

That second phase may include an additional H6 producer to improve field recovery, while deeper H7 and H8 zones remain candidates for future exploration and potential phased expansion.

Supply Chain Implications for West Africa

The arrival of first oil is expected to stimulate demand for:

• Offshore logistics
• Marine support vessels
• Operations & maintenance
• Safety & compliance services

Regional suppliers in West Africa and international EPC firms are likely to monitor tender windows as Benin’s offshore sector matures.

Bond Market Pressure as Lime Petroleum Seeks Relief

In parallel to upstream execution, Rex International’s subsidiary Lime Petroleum Holding AS (LPH) has asked Norwegian bondholders to defer interest payments due January 2026 on its 2027 and 2028 notes.

LPH also requested temporary suspension of minimum liquidity covenants until 31 March 2026, citing delayed Sm Field revenues and unexpected drilling costs. The move underscores the capital-intensive nature of early-stage offshore developments and their exposure to project timelines.

Bondholders have until 23 January 2026 to vote on the deferment.

Investor Sentiment and Risk Disclosure

Rex International advised shareholders to exercise caution while upstream operations and bond negotiations continue. The company committed to updating the market in line with SGX disclosure requirements.

The developments reflect a broader theme in the oil and gas sector: the dual challenge of delivering first oil while maintaining liquidity through volatile commodity cycles.

Global Context: Offshore West Africa Rebounds

The Sm Field milestone aligns with a regional rebound in exploration and development activity. Upstream investments are increasing in:

• Côte d’Ivoire’s Baleine deepwater development
• Namibia’s Orange Basin appraisal campaigns
• Angola’s offshore brownfield expansions

This trend positions West Africa as a strategic investment corridor amid tightening global supply and evolving energy transition expectations.