Gabon is considered one of the richest countries in Africa in terms of crude oil. Even among oil-rich nations, the extent to which hydrocarbons have fueled the Gabonese economy throughout its independent history is exceptional. Indeed, since production started in the 1950s, the majority of Gabon’s GDP has derived from crude oil exports. 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 bdp up from 180,000 in 2020. The 20,000 bdp of production needed to close the remaining gap is in sight, 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 uprise efforts are being focused on the redevelopment of mature or marginal oil fields.
Prior to the onset of the pandemic in 2020, the oil price crash of 2014 had also taken its toll on Gabon, for which oil exports accounted for 80% of total exports and 50% of government revenues at the time. OPEC’s decision to increase production in Q3 of that year roughly halved the global price of oil as well as Gabon’s exports. Moreover, reliance on a few large oil fields discovered as far back as the 1950s meant that output was already in decline, coupled with the rising cost of production. When global prices collapsed, it rendered most of Gabon’s oil and gas industry unprofitable.
Oslo-listed BW Energy has finished drilling and completion operations on the first production well of the Hibiscus/Ruche Phase 1 well, offshore Gabon. First oil from the well was expected in early April 2023. The well has been drilled to a depth of 3,883 meters from the BW MaBoMo production facility into a Gamba sandstone reservoir in the Hibiscus field, one of Gabon’s most southern oil fields. These were expected to yield 5000 bdp, totaling 30,000 bdp by the end of 2023, and 40,000 shortly thereafter. Moreover, after 30-years of frontline service in Gabon, Perenco is producing some 100,000 bdp from its on-and offshore fields, most of which are mature, by applying its trademark EOR technologies.
Gabon Crude Oil Production
Source: CEIC Data
These investments were paid off by 2023, which saw Perenco secure a final investment 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 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 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. Much of Gabon’s offshore areas remain unexplored, holding out the promise of large leaps in production in the coming years. It is thought that the country’s North Basin area might contain game-changing pre-salt reserves.