Last Tuesday, Shell and Gabon’s petroleum ministry signed a memorandum of understanding. Many analysts see this as a strong signal for the country’s attractiveness, especially its offshore oil potential. The British giant follows two other majors that have shown interest in deepwater zones within the past year—ExxonMobil and BP. This suggests Gabon is once again drawing big oil companies. Yet a closer look tempers the enthusiasm.
The document is merely a statement of intent, not a firm commitment. A very long road still lies ahead before any real oil extraction and sales can begin. Shell could easily change its mind later: if exploration results disappoint, if crude prices fall, or if it finds a more profitable country elsewhere, it can walk away without any penalty. This is not the first time Shell and Gabon have crossed paths. The company was already active here, then left in 2017 and exited completely by 2019. Its return today is primarily driven by its own strategy, not a favour to Gabon.
And on that point, the government actually holds some leverage. It now needs to negotiate skillfully. What share of revenue will go to the state? How many jobs and training opportunities for Gabonese citizens? And the subsequent challenge is management: when money does come in, how will it be safeguarded and used to build the future rather than spent immediately? Keep in mind, commercial production takes between seven and fifteen years. Budgetary and employment benefits would only appear between 2033 and 2036 at best. There is much to do in the meantime: seismic campaigns, appraisal drilling, reactivating subcontracting chains, and employing young people.
Gabon is not alone in this situation. Angola and Nigeria have negotiated to maximise gains from such deals. Cost recovery thresholds, state shares based on profitability, transparency and monitoring—nothing was left to chance. The challenge is not attracting Shell; it is on what terms.
While neighbouring countries tighten their rules to turn oil profits, especially offshore, into real development, Gabon seems to be negotiating with the same tools that led to failures over the past three decades. Shell knows this perfectly well: it signs identical MoUs everywhere. What changes is what the host country demands afterwards.
