Share

Gabon seeks tougher terms

London - Gabon is seeking to squeeze more money out of foreign oil companies operating in the country, executives say, potentially damping enthusiasm for a long-awaited deepwater licensing round due next year.
 
The move mirrors similar steps by resource-rich nations around the world over the past decade, when countries such as Kazakhstan or Venezuela clawed back projects or tightened the terms for international companies as energy prices soared.
 
Oil accounts for around half of Gabon's economy but output has fallen by a third since peaking at 370 000 barrels per day in 1997. However, the country's reserves are put at around 3.7 billion barrels, giving it several decades yet of hydrocarbon wealth.
 
The West African country's government has launched audits of oil producers that have led to big back-tax claims and is demanding tougher terms for, and equity stakes in, new contracts, said executives, who declined to be named for fear of jeopardising their interests in the country.
 
"I think it is really driven by the desire to get a better deal for the state," said one oil executive.
 
The government declined to respond to questions about  whether it had launched a concerted drive to extract more money from oil companies but the country's oil and energy minister confirmed some companies were being audited.
 
"We got the opportunity to do some audits to see if a contract is well run and ... we noticed a lot of exceptions," said Etienne Ngoubou.
 
"You engage in some negotiations with the operation company to check each exception and to agree if you have some tax  (due)," he added in an interview with Reuters.
 
Three executives said Addax Petroleum, a unit of China's Sinopec, had been threatened with the loss of an oil field in a dispute over terms.
 
Ngoubou acknowledged the dispute but said the disagreement was over environmental problems at the field, which one executive identified as the Obangue onshore field.
 
"They got some accidents. Their facility doesn't respect the rules of the Institute of Petroleum ... They have to fit with the specifications. Otherwise we take some decisions," he said.
 
Sinopec was not available for comment. Sinopec took control of the field through the purchase of Addax in 2009 in what was then China's largest overseas oil acquisition.
 
Other companies affected by the governments' moves include Canadian Natural Resources and French groups Maurel & Prom and unlisted Perenco.
 
Deepwater hopes
 
In addition to auditing existing contracts, the government is demanding tougher fiscal terms to extend contracts that are close to expiring.
 
Perenco had to agree to tougher terms on the renewal of one of its licences, two industry executives said. The company declined comment.
 
Executives said the government was starting to demand that its new national oil company be given equity stakes in new fields and fields whose licences were due for renewal.
 
The government did not respond to questions about whether equity stakes in existing fields were being sought but Ngoubou said he planned for the state oil company to take a 10-20 percent stake in new offshore licences.
 
It is not unusual for state oil companies to retain stakes in oil licences awarded to foreign oil companies, but the executives said this was new for Gabon.
 
Four executives said the government was also targeting oil services companies, including, two of them said, the local unit of French helicopter charter firm Heli-Union.
 
The government had sought a stake in Heli-Union's Gabon operation and required the company to hire more Gabon nationals, forcing the company to hike its charter prices by 25 percent, one executive said.
 
The company and the Gabon government declined to comment.
 
Gabon plans to launch a new deepwater oil licensing round in June 2013, and recent discoveries in the region have boosted hopes that big reserves could be discovered.
 
The exploration blocks were previously offered in 2010, but that sale was pulled following concerns about offshore drilling safety after BP's Gulf of Mexico oil spill and because the government wanted to make some legal changes.
 
Deepwater exploration is an expensive business, with individual wells costing in excess of $100m, requiring foreign know-how and cash.
 
Oil executives say the government's moves to exert more control over the sector in the past year could deter bidders from the planned auction.
 
"It's probably not the time to scare potential investors," one foreign oil man said.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.89
+0.2%
Rand - Pound
23.84
+0.3%
Rand - Euro
20.36
+0.4%
Rand - Aus dollar
12.30
+0.3%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders