The sharp decline in oil prices in 2014 had a significant impact on Gabon’s economy, as the country heavily relied on oil production, which accounted for half of its GDP. The aftermath of the crisis led to a reduction in direct employment within the oil sector and a wave of company departures and downsizing. However, amidst the challenges, Gabon’s oil and gas industry has undergone transformations, attracting new players and exploring alternative avenues for growth.

The exploration and production (E&P) sector witnessed a remarkable transformation as major companies relinquished marginal fields in the low-price environment. Shell sold its assets to Assala Energy in 2017, while Perenco acquired Gabonese Grondin and Coucal fields from Total in 2018. These changes led to Perenco and Assala Energy becoming the prominent producers, replacing Total and Shell.

Total, despite downsizing after 85 years in the country, remains the third-largest producer, focusing on smaller offshore assets. Recently, Total sold stakes in mature fields to Perenco, emphasizing the shift in the industry’s landscape.

The departure of major companies paved the way for smaller international players to enter the Gabonese market. Companies like Maurel and Prom, Petronas, OLA (Oil Libya Group), and Addax (a subsidiary of Sinopec) have contributed to a more diverse and competitive market. The entry of BW Energy, a subsidiary of BW Offshore, brought further diversity, with its acquisition of the majority shares in the Dussafu field.

Gabon’s oil and gas service sector faced significant difficulties following the price crash, leading to intense competition for contracts. Many companies closed down or relocated to reduce costs. Established players, such as Transocean, had to shut their operations. The remaining service providers face limited contract opportunities, with some companies experiencing stand-by periods. However, companies like Bourbon adapted their business models to offer specialized services, optimizing assets and providing cost-effective solutions. Gabonaise de Chimie, a chemicals merchant, survived the crisis by leveraging its diversified portfolio in other industries.

Service providers in Gabon encounter challenges due to poor logistics and infrastructure, which demand strong networks and international affiliations. The complexity of procurement chains and the limited availability of replacement parts often cause project delays. Companies with both global apparatus and local presence are better equipped to overcome these challenges and secure contracts.

Gabon’s oil production has declined since its peak in 1996, emphasizing the importance of new discoveries. Limited exploration contracts were signed between 2014 and 2019, impacting foreign direct investment in the country. However, recent offshore discoveries, such as BW Energy’s Dussafu and Vaalco’s South East Etame projects, have rejuvenated the industry. The Ministry of Hydrocarbons aims to uncover untapped reserves and has conducted a geo-seismic survey, exploring potential pre-salt reserves in the North Basin. The expansion of seismic access and the 12th Offshore licensing round further incentivize investors.

While oil exploration remains a priority, companies have also explored gas reserves in Gabon. Currently, only Perenco operates a significant gas reservoir. Eni and CNOOC are in the process of obtaining permits for their gas discoveries. However, limited LNG infrastructure and the absence of a favorable legal and tax regime for gas exploration pose challenges to its development.

Gabon’s oil and gas industry has experienced significant changes since the oil price shock in 2014. Despite the challenges faced, new players have emerged, and exploration efforts have yielded positive results. The sector continues to adapt to market dynamics and seeks opportunities for growth. With a focus on fresh discoveries and the development of infrastructure, Gabon aims to attract further investment and ensure the long-term sustainability of its oil and gas industry.