“The new hydrocarbon code is fiscally more advantageous”
Gabon Oil Company’s Managing Director outlines new opportunities for investors in the country’s oil sector
Oil production in Gabon is now stabilized at 200,000 barrels per day. Do you think it will remain at this level?
Patrichi Christian Tanasa: I believe it will start to pick up soon, in particular because Petronas made a very interesting discovery in very deep offshore, which is where the new opportunities lie nowadays.
Last year, Gabon adopted a new hydrocarbon code to replace the previous one, which dated from 2014. What are the objectives of the new code?
The 2014 code was not attractive enough, in particular in terms of taxes—as evidenced by the fact that only two contracts were signed under it. The new code is fiscally more attractive and is also more flexible, in particular concerning exploration and production. Furthermore, it is more transparent, notably as regards tenders. We hope that all these elements make it more attractive for future investors while at the same time guaranteeing the interests of the Republic of Gabon.
Oil is obviously a key engine for the economy of Gabon. What is the responsibility of Gabon Oil Company in the nation’s economy?
Gabon Oil Company (GOC) represents the Gabonese state in the oil sector. In particular, we are responsible for leading exploration campaigns and making fields available. We manage participations in some fields on behalf of the state. For example, not long ago we signed an association agreement with Perenco whereby we enter 32 fields, and we are currently in talks with Maurel&Prom for something similar. But we also act as a national operator. The purpose of GOC is to better manage oil costs and to optimize the country’s revenues.
What are the main challenges for Gabon Oil Company in the short and medium term?
The first one would be to prove our capacity as an operator. We have a field, Mboumba, which currently produces 1,000 barrels per day. The objective, apart from the investments that need to be made to preserve the integrity of the equipment used in this field, is to double production within six months to one year. The second challenge is to take more stakes. A few months ago, we started negotiations with [Norwegian company] BW to acquire 10 percent of the stakes, and the first oil was produced in September. So we are now finalizing these discussions. We also are keen to identify opportunities in other fields and to acquire participations.
The purpose is to strengthen our credibility at national level in order to raise our profile internationally.
What is the role of Gabon Oil Marketing, a subsidiary of Gabon Oil Company?
Gabon Oil Marketing operates in the downstream sector. It was created originally to manage the sale of the products of our refinery. The idea was to have a company that would exclusively manage the supply of petroleum products for the national market.
Today, Gabon Oil Marketing is the link between the Société gabonaise de raffinage, [the national refinery company] and the national market. But the refinery can only meet about half of our needs nationally so we have to import the rest. Gabon Oil Marketing also has a strategic role to ensure we have strategic reserves and there is no break in supply.
How do you assess oil prices at the moment, and how do you think they will evolve?
I think prices are going to stabilize. We are now at $60 and we hope prices won’t go below. For 2019, I foresee prices stabilising at between $55 and $65, which is acceptable insofar as it enables operators to invest.