Gabon postpones new oil law until 2015

The government of Gabon has delayed the planned introduction of a new oil law at the end of 2013 until early 2015. No reasons have been given for the postponement.

 

French oil major Total, one of the largest producers operating in Gabon, is understood to have said the new 2015 target date for the law is troubling, as it leaves more time for the government to change tack. Total, partnered by Marathon Oil, Cobalt International Energy and the government of Gabon, made a significant offshore discovery in the Diaba licence, beneath a salt layer in deep waters off the coast of Gabon in August 2013.

 

Gabon currently pumps close to 240,000 b/d, down from a peak of around 370,000 b/d in 1997, with the hydrocarbons sector accounting for approximately 80% of the country’s export earnings, according to law firm CMS Cameron McKenna. The government hopes for a revival in production following Total’s discovery and says it expects production to reach 500,000 b/d in the near future.

 

Gabon’s Oil Minister Etienne Ngoubou is also reported to have indicated that Gabon may revoke the licences of companies that fail to respect their contractual obligations, signaling a clear movement on the part of the government to contract with foreign oil companies on more robust terms. In January 2013 Gabon revoked the Obangué licence of Addax Petroleum, a subsidiary Chinese refiner Sinopec, after Addax allegedly failed to pay customs duties and comply with other laws. Gabon’s Ministry of Oil transferred the onshore field from Addax to the recently-created national Gabon Oil Company, which now operates Obangué. Addax has denied the allegations against it and the case – in which it is understood claims and counter-claims total more than $1bn – remains before the International Chamber of Commerce’s arbitration court.

 

Despite the delay in introducing a new oil law Gabon’s prospects are likely to continue to attract considerable interest. The country awarded 13 blocks to 11 companies as part of a major deepwater licensing round in October 2013, and Ngoubou has said the country will consider rejoining OPEC as its production rises.