Globally, oil operators have been hit hard by the downfall of oil prices as a result of the weak demand originated from lockdowns around the world and a slowdown in the global economy. In Gabon, operators such as Total Gabon, Assala Gabon, BW Energy and Panoro Energy have announced a reduction of their upcoming investments in 2020.
“In view of the current prices of oil, we are taking an even more selective approach, by considering the health and economic situation, while having at heart to preserve the company and its future projects. Our investments will therefore be reduced, sometimes significantly, ” said Stephane Bassene, managing director of Total Gabon in an interview with the Gabonese daily news outlet L’Union.
According to him, a price per barrel around $20 for several months would constitute a major challenge for the company.
“I think there are few oil companies in Gabon and elsewhere in the world that would be able to withstand such low prices for several months. At Total Gabon, we are tackling this crisis without debt, which is rather favorable. That said, we are being impacted just as badly and we must take all necessary measures to resist and preserve the business,” he said.
Despite the sector’s current gloom, the oil company is not considering layoffs at this time.
“We have a dialogue which is constant and permanent with the employees and their representatives. We hold two weekly meetings with staff representatives. This is an approach we have taken in this difficult period, as in the more favorable periods, to keep everyone mobilized, in a spirit of transparency and listening.”
As an historic producer in Africa, with first oil produced in 1956, Gabon saw peak production in 1997. 2020 is marked as a decisive year in Gabon’s oil production history. Twelve exploration licenses have been signed during the country’s 12th licensing round, which is ongoing and offered a total of 35 blocks.