Gabon’s Enabling Environment is Set to Pay Off with Massive Investments in Energy
The African Energy Chamber is in Libreville this week for a working visit to promote investments into the country’s oil & gas value chain and support the development of the local private sector. During its visit, the Chamber lauded the leadership of H.E. Ali Bongo Ondimba in pushing for the country’s new Hydrocarbons Code and Gabon’s potential to attract substantial investment, and expressed its support to the Government’s continued drive to create an enabling environment for the local and international private companies.
“Gabon is a well-established African petroleum province entering into a new era of growth and energy transition,” declared Nj Ayuk, Executive Chairman at the Chamber and CEO of the Centurion Law Group. “The country’s ambition to increase investment in upstream, expand energy infrastructure and above all develop a robust gas industry needs to be backed by private sector capital and technology. This requires the creation of a strong enabling environment, which is what the industry is calling for. It is extremely encouraging to notice the impact of recent reforms on the ease of doing business and investors sentiment in Gabon.”
The country passed last year its new Hydrocarbons Code, which contains more attractive fiscal terms, in line with other sub-Saharan competitors. The new regime already saw the signing of 12 PSCs with foreign companies such as Assala Energy, Petronas, Sinopec and Perenco, boosting investors confidence in the market’s potential. Meanwhile, very recent discoveries have been made by Vaalco Energy at the Etame Field, whose PSC was extended in 2018 for another ten years in order to provide for additional investment.
The country is currently promoting its sedimentary basin through its 12th Licensing Round, which offers no less than 35 oil & gas blocks to bidders. A delegation from the Ministry of Petroleum, Gas, Hydrocarbons and Mines led by H.E. Minister Vincent de Paul Massassa was in Houston this week where it met several partners and foreign investors. Such a strong showing from Gabon is expected to generate substantial interest from operators, and result in the signing of several additional PSCs this year.
Gabon’s new regulatory framework also puts a strong emphasis on local content. The Hydrocarbons Code notably introduces the concept of indigenous enterprise (“société autochtone”), defined as a Gabon-registered company whose management is Gabonese, where at least 60% of the capital is held by Gabonese nationals, and whose workforce is composed by at least 80% of Gabonese nationals. Gabon’s indigenous companies are given priority and preference over the signing of exploitation conventions for the development of marginal discoveries and marginal and mature fields, in a bid to build a strong local value chain.
“The private sector will be driving the growth of Gabon’s energy sector, and the new Code has put in a place a framework which is very encouraging for local companies and entrepreneurs,” added NJ Ayuk. “It gives an opportunity for the Gabon Oil Company to be a key player in driving up partnerships across the country’s oil & gas sector while providing opportunities for the local private sector to grow along. We truly look forward to supporting the country into this new journey.”