In an effort to stimulate its petroleum industry, Gabon announced it will soon complete the comprehensive revision of its Hydrocarbons Code. In a special event hosted by the Ministry of Petroleum and Hydrocarbons in Libreville, Gabon declared it wants to create a more competitive and flexible environment for oil and gas investment.
The existing fiscal regime was designed for an oil barrel price of $100 and should now reflect realistic market conditions, said H.E. Pascal Houangni Ambouroué, Minister of Petroleum and Hydrocarbons.
“Through this historic initiative we wish to bring Gabon to global standards of excellence for operating in the oil and gas industry,” said the Minister, addressing an audience of 400 delegates attending the event.
Over the next three days, the Ministry is holding several seminars to gather input from industry stakeholders on how to optimize the impact of the Hydrocarbons Code revision. The event included the participation of OPEC and government delegations from Equatorial Guinea and the Republic of Congo. The Gabon government wants a new investment framework that enables immediate increases in production and enables new oil and gas exploration. One of the key revisions to the code will establish highly anticipated regulations for gas industrialization and monetization. For the first time natural gas will be recognized as a resource equal to oil, with provisions to exploit discovered reserves and reduce gas flaring to a bare minimum.
Efforts to renew Gabon’s flagging hydrocarbons code began four years ago, spurred by a climate of plummeting oil prices and dwindling exploration activity. A sustained industry downturn prompted heavy consolidation amongst industry players. In 2017, Perenco acquired several producing legacy assets from Total for $350 million. Not long after, Shell sold all of its onshore acreage in Gabon to Carlyle Group, which spun off the acquisition into Assala Energy.
The revitalization of the sector is being welcomed by well-established oil and gas companies in the country which said a decline in commodity prices had rendered Gabon’s fiscal regime outdated and the country’s investment prospects imperiled.
“This is a historic occasion which has been four years in the making,” said Denis Clerc-Renaud, General Director of Perenco Gabon. “The new code will make Gabon competitive in the international investment domain.”
The new petroleum code, he said, “should be able to replace oil production through new discoveries while sustaining current production levels.”