Gabon launches new oil bidding round
Gabon officially launched a 2016 offshore bid round, offering five deep fields targeting a reversal on production slowdown, the country’s petroleum and hydrocarbons minister said
Announcing the bid round at an African Oil Week in Cape Town, Ngoubou said the ministry expected to finalise the bidding by mid-2016.
Average oil output dropped in 2013 to the lowest level since 1989 with only 220,276 barrels a day (b/d). Production stagnated at around 240,000 b/d since 2006, following a decline from record production in 1996 of 365,000 b/d.
Gabon held its 10th licensing round for production-sharing-contracts in October 2013. Bids for 18 blocks were made, of which 13 were successful, although this was reduced to nine deepwater blocks and ultra-deepwater blocks in July 2014.
In September 2014, Gabon’s new hydrocarbons law was published. The new law has been a cause of concern for companies, who are questioning the extent of the state’s control in production-sharing contracts.
The new law enables the state to take up to 20% stake, paid at market value, in the share capital of companies requiring or holding an exclusive use. The law establishes a mandatory state participation of 20% without payment in all news production-sharing contracts. In addition, the Gabon Oil Company has the option to acquire a 15% stake at the market price.
The law also reinforces local content quotas, requiring 9% of workers be Gabonese. The law was brought in as a way to attract foreign investment.
French major Total’s announcement in 2013 that it has found hydrocarbons in Gabon’s ultra-deepwater pre-salt layer raised interest. In July 2014, Eni said it had struck gas and condensate in offshore D4 block. Eni estimates that the gas discovery may be significant with potential in place estimated at 500 million boe. In October 2014, Anglo-Dutch Shell announced a frontier discovery offshore Gabon in a pre-salt reservoir with block BC10.
This has raised hopes that offshore West Africa may contain deepwater reserves on a scale comparable to those found offshore Brazil.