The reappearance of Shell in Gabon marks a pivotal moment for the nation’s petroleum industry. Ten years after divesting its interests, the Anglo-Dutch energy giant is poised to recommit to the Gabonese sedimentary basin. This move comes as Libreville actively seeks to counteract a persistent decline in its hydrocarbon output. The announcement, made amidst a climate of reforms initiated since the recent political transition, underscores the authorities’ determination to send a clear message to international investors.
Back in 2016, Shell formalized its exit from Gabon by transferring its onshore assets to Assala Energy, a company then under the control of the Carlyle fund. This transaction, valued at hundreds of millions of dollars, was part of a broader global portfolio streamlining effort by the group, which was prioritizing projects deemed more profitable, particularly in liquefied natural gas and deepwater exploration. The departure of the oil major had left a significant void, as Gabon lost one of its long-standing operators.
A political impetus for Gabon’s oil and gas sector
Shell’s return takes place under the leadership of President Brice Clotaire Oligui Nguema, who assumed power following the August 2023 transition and was later confirmed by popular vote. In recent months, Gabonese authorities have intensified their efforts to enhance the attractiveness of the upstream framework. These initiatives include a revision of the hydrocarbon code, the relaunch of block allocation cycles, and the initiation of bilateral discussions with several major companies. The overarching strategy aims to reverse the trend of oil production, which currently hovers around 200,000 barrels per day, a stark contrast to the historical peak achieved in the late 1990s.
For Shell, the decision to re-engage is far from inconsequential. The group, which had previously opted to divest mature assets considered less strategic, is now recalibrating its perspective on the African continent. The scarcity of major onshore discoveries, the increasing cost pressures associated with ultra-deepwater exploration, and the ongoing search for medium-term oil growth drivers are reshaping the priorities of major energy companies. In this evolving context, the Gabonese basin, with its remaining prospects in deep offshore and around pre-salt structures, has regained a certain appeal.
Libreville aims to revitalize declining oil production
Petroleum production traditionally serves as Gabon’s primary source of foreign exchange, typically accounting for over 40% of budgetary revenues and nearly 80% of exports. However, the gradual depletion of mature fields, combined with a reluctance to invest in recent years, has destabilized this crucial economic balance. The authorities are now banking on the return of prominent industry players to bolster exploration activities and extend the operational lifespan of existing deposits.
Several international entities have already expressed renewed interest in the country. The national company, Gabon Oil Company (GOC), is progressively increasing its role in asset governance as existing contracts reach their expiry or undergo renegotiation. Within this framework, Shell’s potential return could involve partnerships with other operators already established locally, such as Perenco, TotalEnergies, or BW Energy, who have consolidated their positions on various offshore blocks.
Strategic return: details yet to be defined
The precise terms of the major’s redeployment still require clarification. This includes the scope of the blocks involved, the timeline for commitment, the magnitude of investments, and the specific contractual model. The nature of the targeted permits, whether onshore or in deepwater, will significantly influence the scale of Shell’s re-engagement. A presence in deep offshore would necessitate commitments amounting to several hundred million dollars, whereas a strategy focused on mature assets would imply a more conservative approach, primarily geared towards optimizing existing production.
Beyond the specifics of Shell’s case, the broader credibility of Gabon’s new oil policy is at stake. Libreville’s capacity to translate these announcements into tangible investments, particularly in a competitive environment where Nigeria, Angola, Namibia, and Senegal are fiercely vying for capital from major companies, will dictate the trajectory of the sector over the coming decade. In this regard, the return of the Anglo-Dutch company represents a significant real-world test for the new government.
