However, after oil production peaked in 1996, Gabon’s future looked less certain, particularly following the price crash of 2014 and the disruption caused by the Covid 19 pandemic.

But a combination of regulatory changes, global market realities, and renewed interest from investors promises to reverse this trend and return Gabon to the good times last seen in the 1980s.

In 2019, the Gabonese government had set an ambitious target of 220,000 bpd of crude oil production by 2023. Although that target was missed, production in April stood at 200,000 bpd, up from 180,000 in 2020. The 20,000 bpd of production needed to close the remaining gap is in sight, largely thanks to 18 exploration and appraisal wells drilled in 2022 and 2023, and further investment from a handful of leading international companies seeking to cash in on rising global prices. Given Gabon’s background, it is no surprise that much of the country’s upstream efforts are being focused on the redevelopment of mature or marginal oil fields. Prioritizing short-cycle developments generate cash flow at lower cost by utilizing existing discoveries and infrastructure, which can bring production online within a few years.

This charge is being led by Perenco and BW Energy, which both have plenty of experience in brownfield projects, particularly offshore. BW Energy, a local incarnation of Norway’s BW Offshore, is drilling eight horizonal wells into the Hibiscus/Ruche field, part of its offshore Dassafu block. Each of these are expected to yield 5000 bpd, totaling 30,000 bpd by the end of 2023, and 40,000 shortly thereafter. This asset and its MaBoMo drilling platform is located 20 km away from the Tortue field, also operated by BW, and both fields are connected to the company’s Adolo FPSO by sub-sea pipeline. Rising oil prices resulting from the Russian invasion of Ukraine and the Saudi-led cut in production prescribed by OPEC April 2nd prompted BW to speed up the drilling campaign by combing what were going to be two separate phases of the project to bring more oil to market as soon as possible.

After 30-years of front-line service in Gabon, Perenco is producing some 100,000 bpd from its on- and offshore fields, most of which are mature, by applying its trademark EOR technologies. During the price crash of 2014-15, the company went against the grain with a foresighted 40-well drilling campaign, accompanied by 200 km of pipelines, processing facilities, and the Mayumba FSO to gather production from its various offshore interests. These investments had paid off by 2023, which saw Perenco secure a final investment decision for the $1-billion Cap de Lopez liquified natural gas facility, as well as an MOU signed with Gabon Power Company to construct a gas-fired power plant in the south of the country, both of which speak to the success Perenco’s upstream and associated gas-harnessing capabilities.

To balance these efforts, the redevelopment of mature fields is being complemented by a renewed enthusiasm for exploration. Gabon has a limited number of drillable prospects that are close enough to existing facilities and infrastructure for tiebacks to be feasible. And the probability of discovering large new reserves in in mature basins is low, as demonstrated by the fact that most recent high-impact African oil discoveries, like Mauritania’s 1.3 billion-bboe Orca-1 field, have been in greenfield developments. Much of Gabon’s offshore areas remain unexplored, holding out the promise of large leaps in production in the coming years, and it is thought that the country’s North Basin area might contain game-changing pre-salt reserves. Gabon’s new Hydrocarbons Code, introduced in 2019, hopes to explore this potential by presenting international companies with better returns on their E&P investments and government is galvanizing efforts to step up seismic studies to provide potential investors with the data they need.

Although focusing on short-cycle redevelopments makes sense given Gabon’s many mature fields and the current spike in energy prices, it is important that it does not come at the expense of exploration. Focusing on steady production may represent local producers applying a longer-term strategy to their presence in Gabon, but the local energy sector also needs new discoveries, and the country’s unexplored shallow and deep-water basins deserve more attention than they are receiving.

All this and more will be further unpacked in Energy Capital & Power’s (https://EnergyCapitalPower.com/)  upcoming market report, Energy Invest Gabon. Keep following for more information about this exciting report!