When Pascal Houangni Ambouroue, the Gabonese minister of petroleum, emerged March 28 from three days of meetings, he declared that the country’s new hydrocarbon code would herald a new dawn for the West African state.
“It is not a question of yielding a part of the revenues but making the code more flexible and to adapt to a complicated conjunctural situation that we know today,” he told the assembled press.
Gabon is among the top five oil producers in Sub- Saharan Africa and has been an oil producer for more than 50 years. It reached its peak 12 years ago when oil production hit 370,000 bbl/d to its current level of 200,000 bbl/d. To combat the natural decline of mature fields, the government has focused on offshore resources, which account for more than 70% of the reserves.
Under the current code, Gabon takes a minimum 20% stake in oil projects, while country-owned Gabon Oil Co. is entitled to a further 15% stake. Like other oil-dominated economies of the Economic Community of Central African States’ single-currency zone, Gabon has struggled due to the decline in crude prices, forcing it to seek support from the International Monetary Fund (IMF) in 2017.
Although full details are yet to emerge, the new codes will feature improved flexibility along with revisions to company tax and value-added tax. It is envisaged that the new code will become effective in June. With oil revenues at a nadir, down to 27% of GDP in 2017 compared to a high of 45%, Gabon was forced to turn to the IMF for support, which insisted Gabon diversify its economy.
Ambouroue said Gabon is among Africa’s safest oil-producing countries.
“At the moment most of the oil wells that are producing are mature, which is why the Gabonese government has put in place a set of measures, such as the revisions to the hydrocarbon code, to improve production from these mature wells and also encourage exploration and discovery of new oil in deep water offshore,” he said. “This will also stimulate the entry of new players with the major companies now focused on deep waters for production of oil and gas. Ongoing prospecting shows that Gabon has very good resources in terms of oil and gas for the future.
“To combat the natural decline of mature fields, the government has focused its attention on offshore resources, which account for more than 70% of the reserves,” he said.
There are about 30 producing oil fields in the region, making Gabon the fifth largest oil producer in Africa. However, production is declining.
The Gabonese government launched its 10th bidding round in late 2013, generating new production-sharing contracts with Marathon Oil, Petronas, Repsol, Noble Energy, Woodside, Impact Oil & Gas and Ophir Energy, which are all working on their exploration programs. Another round was launched just over two years ago, but the government was forced to suspend it as low oil prices and the proposed economic terms failed to attract the desired interest. This led to recent amendments to the code.
Promoting local benefit
As is common in most of Africa’s oil- and gas-producing regions the government is seeking to support local small and medium-sized enterprises that provide services to multinationals along with increasing the employment and training of nationals. One of the tools being utilized is the creation of a special economic zone.
“The existence of this special economic zone is very important to support the industries that will build up around oil and gas exploration, and this activity will also support the development of the country,” Ambouroue said. “It is important that we have a dedicated economic zone to support this. A strong economic base will arise from these areas. We are very aware that oil and gas are important to the economic development of the country, and we are implementing several areas of improvement in Gabon that will allow the people to benefit from the increase in activity that we are planning.”
Ambouroue points to polices under development by Ali Bongo Ondimba, the Gabon head of state, which will allow the population of Gabon to benefit from the oil revenue generated.
“A part of that is ensuring that there are enough skilled workers, and so training is now playing a key role in Gabon,” Ambouroue said. “We are putting in every effort to make sure we have the process in place to ensure that our workers are up to date with the modern trends in the oil and gas industry. We have two priorities: the first is to make sure we have in place the infrastructure that will allow local content in the developments, and the second item is the revision to the hydrocarbon code. In this area we will integrate for the very first time a new economic model for the local community, which is a win-win situation.”
Following the three-day seminar in Libreville, the capital of Gabon, which focused on revisions to the hydrocarbon code, Ambouroue and his team will travel around the world on a road show to tell investors why Gabon is an attractive country for oil and gas investment.
“The original code was written when the oil price was at $120, so this needs to be revised to make the oil and gas industry in Gabon attractive and encourage more people to invest in our industry,” Ambouroue said. “The entire structure is drastically changing in Gabon, and we need to adapt our code so that the oil industry is once again attractive.”
Gabon seismic survey
The shallow offshore waters of Gabon have been explored for more than 50 years, highlighting the potential for oil discoveries. However, exploration of the more complex, salt-obscured geological structures requires an advanced support that only modern, regionally consistent 3-D seismic data can provide. Such support was the objective of a large-scale 3-D seismic program created through collaboration between Spectrum Geo and the Gabonese hydrocarbon authorities, Direction Générale des Hydrocarbures.
In late 2016 Spectrum commenced acquisition of an 11,500-sq-km (4,440-sq-mile) 3-D survey in the Gryphon area of Southern Gabon—the shallow offshore of Mayumba and Sette Cama, west of the Olowi Field—in water depths between 20 m and 1,000 m (66 ft and 3,281 ft). The survey attracted strong industry funding and was completed at year-end 2017. It now offers the most relevant 3-D imaging of the area and is the definitive dataset to image presalt and, for the first time, intra syn-rift plays can be targeted.
“We undertook some seismic testing with Spectrum and CGG that delivered some exciting results, but at the end of the day it recognized that we have good reserves; and this has been communicated all over the world. We carried out these surveys so that investors have the information they need, and we want to attract more investors to the country,” Ambouroue said. “The information gained from the two countries will be available so that everyone can see the opportunities for investment. This is to help us to communicate the oil potential of Gabon to everyone, and this, alongside the revision to the hydrocarbon code, will help attract more investors to develop all the blocks.”
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