Gabon to See Increased Investment

Friday, September 12, 2014

Gabon is set to settle a significant amount of revenue in its coffers from its latest licensing round. Following months of negotiations the government signed seven exploration and production-sharing contracts in August, which it hopes will spur new exploration in deep-water offshore blocks and generate up to $1.1 billion in new investment, according to estimates from Gabon’s Ministry of Oil.

Companies like Repsol, Marathon, Petronas, and Woodside were winners in the round and will be investing a substantial amount of cash exploring their respective blocks. Besides the funds paid to the government for access to these blocks, successful exploration by these companies will  give Gabon more income as the country’s newest petroleum code carves out a larger role for the state as well as allowing it the option to capture a greater share of oil revenues. It seeks to clarify investment and production sharing terms, as well as the role reserved for Gabon Oil Company (GOC), which will have the right to purchase a 15% share in all new oil contracts.

Over the past several months the government sought to take a tougher approach to auditing and managing the petroleum sector. The negotiations for the blocks have taken some time and the list of potential awardees changed more than once; in fact, two companies that were invited to negotiate as recently as July, ExxonMobil and Ophir Energy, did not make the list of winners. Meanwhile Woodside, who was named a winner, did not feature on any list published.

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