Can you provide an overview of Independent Petroleum Consultants (IPC) and the work you do in Gabon?

IPC is a consultancy firm that was established in 2000 with the goal of promoting oil exploration in the Gulf of Guinea. As the founder of IPC, with more than 26 years of experience in the oil industry, I recognized the market’s needs and formed a network of experts to address them. Over the years, we have represented 20 companies, assisting their endeavors in the region, particularly considering the numerous challenges faced by the sector.

In the global economy, renewables are gaining relevance and the adoption of electric cars in the US and China indicates forthcoming changes. However, oil remains the present reality. How do you assess the future outlook for oil worldwide?

While renewables are indeed gaining traction, it is difficult to determine when or if oil will become obsolete on a global scale. Presently, oil remains a vital component of the energy landscape. The transition to alternative energy sources is a gradual process, and oil will continue to play a significant role in the foreseeable future.

Gabon has experienced a significant economic downturn in the past five years, largely due to the shale revolution in the US and subsequent low oil prices. How has this downturn manifested on the ground?

The economic downturn in Gabon can be attributed to various factors within the wider global economic context. In response to these challenges, Gabon is currently conducting its 12th Licensing Round, as the previous 11th round for oil contracts did not yield desired results. Since the drop in oil prices in 2014, many players in Gabon have left the country. For example, Shell sold its onshore assets to Assala Energy, while Norway’s BW Offshore acquired a significant discovery at Dussafu, where production from recently drilled wells is already reaching 12,000 barrels per day. Efforts to improve existing assets are being undertaken by companies like Assala Energy and Perenco. Perenco has taken control of Total’s interests in five fields and the Rabi-Coucal-Cap Lopez pipeline network. While signs of recovery are visible, further exploration and new discoveries are crucial to support Gabon’s economy and compensate for the decline in oil production.

Gabon is the fifth largest oil producer in Africa, but there have been few significant discoveries in recent years. Can you elaborate on Gabon’s potential for finding new reserves in the coming years?

Apart from the successful appraisal of the Boudji discovery by Petronas in Dussafu, there have been limited major discoveries in Gabon recently. The lack of financing for exploration, due to global banks’ reluctance to invest, has been a challenge. Additionally, currency controls have created barriers for potential investors.

However, there is still untapped potential in Gabon’s energy sector. Total recently announced the discovery of gas-condensate in the deep-shore Diaba block, and Shell also made a gas-condensate discovery on the Leopard, located in the deep offshore of the northwest coast of Gamba. The main challenge lies in the reservoir quality under conditions that entail high costs and advanced technology. Investments need to be justified by potential extraction returns compared to upfront and development costs.

Some experts believe that Gabon’s future lies in gas, as it occupies an intermediate position between oil and renewables. Countries like the US and Japan have already made strides in the gas sector. However, studies conducted by companies like Petronas indicate that possibilities for oil production still exist in Gabon.

How has the industry received the new oil code in Gabon?

The new oil code in Gabon was proposed by the industry itself and reflects the views of the private sector, both in economic terms and general philosophy. Although some modifications have been made, the code primarily focuses on providing economic incentives.

Following the period starting in 2014, promoting Gabon has been challenging due to unappealing fiscal terms for companies interested in exploration. The updated petroleum code aims to encourage exploration by offering attractive incentives. However, there are still hurdles to overcome in terms of foreign investment.

One significant challenge for businesses in the oil industry in Gabon is the incentive structure. Negotiations often revolve around signing bonuses, whereas the focus should be on the long-term work program. Decision-makers need to adopt a long-term perspective, as field development takes over five years and production can continue for up to 20 years. The return on investment must be evident throughout this timeline.