New foundation, new frontiers in GabonSeptember 12, 2019
Patrichi Christian Tanasa, administrator and general director of Gabon Oil, talks to TOGY about the latest developments in Gabon’s hydrocarbons industry, the new hydrocarbons code and the upcoming bid round. Gabon Oil is the country’s NOC and controls the upstream operator, Gabon Oil Company (GOC), and downstream arm, Gabon Oil Marketing.
Could you give us a brief overview of the key milestones that have marked the development of Gabon Oil group?
The recent development of Gabon Oil can be put into perspective with some key milestones. Created in 2011, Gabon Oil Company was granted in February 2016 the power to represent the state in upstream activities, more specifically in petroleum contracts. This led in December 2018 to the acquisition of minority shares in several permits owned by major oil operators in the country.
In March 2019, GOC closed a deal with BW Offshore to acquire a 10% participation interest in the Dussafu licence. In the meantime, we expanded our downstream activity with the creation of Gabon Oil Marketing in August 2016 and the merger with Sogara, Gabon’s sole refinery, in June 2019.
It is important to keep in mind that this development obeys a guiding principle contained in Decree No. 102 of the 2014 version of the Hydrocarbons Law of Gabon. This perspective makes it clear that everything should contribute to the establishment of Gabon Oil group as a key player in the oil industry in Gabon and Africa. This is why, since taking office, we have been working to transform our organisation and operations to position ourselves for the current national and global challenges in the hydrocarbons sector.
To this end, we are deploying new development strategies that take into account the new hydrocarbons environment in Gabon and the human potential of its highly qualified employees, who are 100% national, as well as the goals clearly defined by our governance policy. It is with this in mind that the creation of the Gabon Oil group allows us today to reinforce the firm’s presence in all upstream and downstream oil activities, and to increase our mark on the Gabonese economy.
We are driven by one major goal: capturing value in a responsible manner while respecting our values of performance, solidarity, integrity and good governance. This aim drives our actions, because the Gabon Oil group must become a real lever of economic and social development in our country.
What opportunities will the new hydrocarbons code create for the development of the oil industry in Gabon?
Our current oil code was adopted in 2014, but the willingness of the highest authorities in the republic to strive for continuous improvement has allowed a discussion about a new code, which is currently in the second reading in the Senate. [As of June 2019; the new code was enacted in July 2019.]
It should be remembered that, unlike the previous code, the new code offers five definite advantages: flexibility, adaptability, attractiveness, reductions in the proportional mining royalty and a minimum profit oil reduction.
Under the new production-sharing agreement, oil companies will be granted the opportunity to conduct exploration projects in areas already in exploitation zones. The PSC will be extended by two years compared to the previous code, with specific provisions for marginal fields.
The fiscal pressure on oil companies has been drastically reduced. The 35% income tax on oil companies is eliminated in the new code, meaning that oil companies will be exempt from it.
Moreover, mining royalties have been downsized to support the development of new exploration and production projects in Gabon. Oil mining royalties have been cut from 13% to 7% in conventional zones, and from 9% to 5% in deep and ultra-deep offshore zones, compared to the previous code. The decrease is even more significant for gas, with royalties going down from 13% to 4% in conventional zones and from 9% to 2% in deep and ultra-deep offshore zones.
Last but not least, the minimum profit oil has been reduced by 5%.
What are the opportunities for international players during the 12th licensing round and your expectations for proposals?
Twelve conventional offshore blocks are on the table as well as 23 deep offshore blocks. This is a great opportunity for companies to increase their reserves or gain a foothold in Gabon. A new seismic study was conducted under the supervision of Spectrum in order to facilitate exploration and open new basins in the pre-salt, sub-salt and ultra-deepwater post-salt. The more multinationals are interested in our sedimentary basin, the greater our opportunities will be to make high-quality, technical discoveries. We have been promoting our blocks around the world with a roadshow that went to four continents – Europe, Asia, the Americas and Africa – and many cities such as London, Singapore, Houston, Beijing, New Delhi, Malabo, Moscow, Brasilia and Cape Town.
What is your strategic vision concerning the co-operation between national hydrocarbons companies?
Since May 2018, we have been working on a framework that allows national oil companies to address issues that affect them. Thus, in April 2019, we gathered all our peers in Malabo as part of the APPO CAPE VII conference to present our vision of strong and united NOCs. Following this meeting, they all agreed on the need to have an exchange platform and a place to exchange human resources and experienced personnel, as well as conducting joint studies, exchanging studies which have already been carried out and sharing technical and technological experience.
What are Gabon Oil’s commitments regarding social and environmental responsibility?
Gabon Oil is fully aware of its responsibility to society. It listens to the concerns of the Gabonese people. It supports the state in the implementation of its social and environmental policies and the protection of vulnerable populations.
It supports all efforts directed towards the well-being of communities through patronage and sponsorship of activities such as the renewal of orphanages or learning centres, such as the Ibékelia rehabilitation centre, and youth empowerment, through the BARC project. Thanks to an agreement with the National Employment Office, Gabon Oil contributes to the reduction of the youth unemployment rate through the CAJ programme, which allows the group to receive young apprentices internally.
In the world of sport, Gabon Oil supports football with a double sponsorship. The first will allow the School and University Games to be resurrected, and the other supported the organisation of a national football championship this year, which ran smoothly. Other disciplines are also supported, such as athletics through Run In Masuku, the Port-Gentil 10k or the Gabon Marathon, not to mention the Tropicale Amissa, which is the most prestigious cycling race in Africa.