According to the 2008 BP Statistical Energy Survey, Gabon had proved oil reserves of 1.995 billion barrels at the end of 2007 or 0.16 % of the world's reserves. For the same period, Gabon produced an average of 230 thousand barrels of crude oil per day, 0.29% of the world total and a change of -2.1 % compared to 2006.
Gabon is a moderately wealthy country with diverse natural resources. It is also sub-Saharan Africa’s fourth largest oil producer whilst holding the third largest oil reserves in the region. As such the upstream oil industry plays a critical role in the economy, representing approximately 80% of the country’s export revenues. The country is almost wholly dependent on oil revenues to fund its economy. Exports of crude oil account for approximately 60% of the government’s budget and more than 40% of GDP. Natural gas is a relatively unexploited natural resource in Gabon.
Gabon’s export crudes are in the 30· to 35· API range, with a small amount of 25· API. Export crudes are the Rabi Light (35· API) and the Mandji Blend (30· API) streams.
Gabon’s largest oil field is the Shell operated Rabi-Kounga oilfield, with estimated reserves of 440 million barrels and production of 150,000 bpd which accounts for 40% of national output. The second largest field is the Gamba-Ivinga field, also operated by Shell with production rates of 10,000 to 15,000 bpd.
The state oil company is Société Nationale Petrolière Gabonaise.
At the beginning of 2005 the IEA announced that without the discovery of new fields current production will deplete Gabon’s oil reserves by 2012. Over half of Gabon’s crude oil shipments are exported to the United States. Much of the rest of Gabon’s crude oil goes to Western Europe and occasionally the Far East.
Ownership of oil and gas and all mineral rights is vested in the State. Companies provide services on behalf of the State and finance hydrocarbon exploration and exploitation activities. Exploration and production companies are licensed under the Exploration and Production Contract (ESPC) established by Law No 14/82 in January 1983 which replaced the Concession Agreement.
Gabon was a member of OPEC until 1996, when it left citing the high annual dues required by the organisation as its reason.
All ownership of oil and gas is vested in the State. It is the only titleholder of mining rights. The Mining Code was established by Law No 15/62 (1962), Decree No 981/PR (1970) and modified under Ordinance 45/73 (1973). The new taxation system is governed by Law No 14/74.
Oil exploration and production licences are acquired by means of Exploration and Production Sharing Contracts (EPSC). Law No 14/82 passed in January 1983 established the EPSC which replaces the Concession Agreement. The terms can be summarised as follows:
· The exploration phase can comprise either two periods of five years, or three periods comprising an initial five years followed by two 2-year terms. This is based on the location of the block and the work programme.
· The exploitation phase comprises an initial 10 year period followed by a second and third perod of 5 years each.
· There is a 10% minimum state participation and 5% minimum Royalty payment (as a function of production)
· In terms of tax and payments, cost oil is limited to 55%. If development costs have not been recovered after five years of production, this could be raised to 75% at the company’s request.
· Signature bonuses are recoverable after 10 years.
