The oil and gas market in Gabon is expected to register a CAGR of more than 0.8% during 2020 - 2025. With a stagnant installed capacity of 333 MW of renewable from 2014 to 2018, oil and gas remain the primary source of energy for the growing and developing economy of Gabon.
- Being the eighth largest producer of oil in Africa, Gabon has enormous reserves to be exploited in the coming years. With the new Hydrocarbon Code implemented in 2019, oil production is anticipated to witness significant growth during the forecast period. However, as most of the reserves of Gabon are in the matured phase, their production has also been declining, which has been pilling down the production and refining market of Gabon.
- Although the refining capacity of Gabon is less, which makes it depend more on the upstream sector. The declining production trend in Gabon is expected to recover in the forecast period with upcoming block distributions.
- With ongoing 12th Gabon shallow and deep-water licensing round for 12 shallow water and 23 deep-water blocks, large-scale operational opportunities in the upstream sector are expected for oil and gas companies in forecast period.
- In July 2019, Gabon adopted Hydrocarbon code 2019 to liberalize the market studied by providing more attractive opportunities to companies investing in Gabon’s oil and gas sector. Financial incentives and the low share of government are few changes adopted in this law.
Key Market Trends
Upstream Sector to Drive the Oil and Gas Market
- According to the OPEC’s World proven oil reserves, there are more than 2 billion barrels of offshore and onshore reserves in Gabon, mostly located in South West of Gabon. This predicts a potential market for development, particularly for the upstream oil and gas companies.
- In 2018, with 30 oilfields in production, Gabon was the eighth-largest oil-producing country in Africa. But most of the fields, which have been declining, have led to a drop in oil production from 221,000 barrels in 2016 to 194,000 barrels in 2018.
- In 2019, Gabon signed seven new exploration and production sharing agreements (EPSA) with Assala Upstream Gabon, Assala Gabon SA, Perence Oil & Gas Gabon Limited, and Sinopec Overseas & Gas limited.
- With 12th offshore license distribution for deepwater projects backed up by the new hydrocarbon code, the interest of major oil and gas companies was observed in 2018-19. Large scale investments by these companies are expected in the forecast period.
- Therefore, with huge reserves of proved oil reserves, and updates policies, the growth in upstream sector is anticipated, assisting in achieving aim to increase oil production by 50 percent by 2020/2021.
Updated Hydrocarbon Code and Upcoming Projects to Drive the Market
- According to BP Statistical review 2018, the oil and gas market accounted for around 50% of Gabon’s GDP and 80% of the country’s export earnings, diminishing production, and the oil price resulted in lower investment in the oil and gas sector, resulting in the implementation of the new Hydrocarbon Code.
- In July 2018, Gabon implemented a new Hydrocarbon code with major updates to lure investments from the international market, even with decreasing oil and gas prices, with changes in contract share and contract tenure.
- The state’s participation has been reduced to 10% during the development and exploitation phase, in addition to a possible 10% acquisition at the market price of shares in any oil and gas producer’s share capital.
- Gabon in 2018, started licensing of 35 blocks; 12 shallow water and 23 deepwater blocks, provided with 17,000km2 of 3D broadband services across key areas, in addition to offering strategically placed national 2D seismic coverage.
- Therefore, with favorable market conditions and presence of huge reserves, investment and growth in the oil and gas sector are anticipated over the forecast period.
The Gabon oil and gas market is partially fragmented. The major companies include Perenco SA, Total SA, VAALCO Energy Inc., Maurel et Prom SA, Gabon Oil Company, and others
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