The Republic of Gabon’s Ministry of Petroleum announced today that it has selected seven companies to participate in a final round of negotiations for deepwater blocks in the offshore licensing tender round from October 2013.
The Ministry said Impact Oil & Gas, Repsol , Perenco, ExxonMobil, Marathon, Petronas, and Ophir were ranked highest after bidding for a total of nine blocks.
"These companies listed are invited to finalize negotiations for the signature of the relevant CEPPs (exploration and production sharing contracts) as soon as possible," according to a statement from Etienne Dieudonne Ngoubou, Gabon's Minister for Oil and Hydrocarbons.
Other companies (Cobalt International Energy, Noble Energy, Royal Dutch Shell, and Total) were ranked lower for the blocks. The ministry said it had the right to open negotiations with these lower-ranking firms if talks with the seven first-choice companies were unsuccessful.
October tender round
Deloitte reported that on 29 October 2013, Gabon's Ministry of Petroleum announced top bidders for 13 offshore blocks. These blocks were originally offered during the cancelled 10th Licensing Round in 2010. The 13 blocks cover under-explored offshore areas in water depths between 200m and 4000m, with a total area of 26,770sq km.
Bidding partners with high bids at that time included: Ophir Energy (A3, A4, A5, A6), Exxon Mobil and Noble Energy (C11), Impact (D14), Marathon Petroleum (E12), Repsol and Exxon Mobil (E13), Perenco (E14), Elenilto and Petronas (F12), Petronas and ENI (F13), Perenco and Petronas (F14), and Marathon Petroleum and Cobalt (G13).
Eliminated companies
In mid-May 2014, the Ministry of Petroleum narrowed the list of potential concessionaires from the October tender round, eliminating three companies: US-based Noble Energy and Cobalt International Energy, and Israel's Elenilto, saying they did not appear to have the resources to finance offshore drilling.
Noble Energy had partnered with ExxonMobil on deepwater block C11, targeting Gabon's pre-salt Cretaceous play, it told investors in December 2013.
Cobalt holds 21.25% interest in the 2.2 million acre Diaba license operated by Total Gabon and participated in the Diaman #1 gas condensate discovery well, which successfully confirmed the existence of a working petroleum system. This was the first test of the pre-salt in deepwater Gabon.
Elenilto is an E&P company established by Jacob Engel, operating oil and gas blocks in Benin, Georgia and Senegal, in addition to worldwide mining projects.
Hydrocarbons code
In October 2013, Gabon said it planned "a more transparent and rigid oil law" that would take effect in 2015. However, Gabon adopted a new hydrocarbons code in February 2014, passed by government edict during a parliamentary recess. Then a different version was published in the country's Official Gazette on 25 April. International law firm Miranda Correia Amendoeira & Associados says the bill will need to be ratified when parliament is next in session and could also be amended at that time.
Gabon has already set up a new agency, says Deloitte, which will publish company and government data on production volumes, tax contributions, reserves estimates, and data on permits.
State-owned Gabon Oil Co. (GOC), created in 2011, is entitled to take a stake of up to 15% in blocks owned by other companies. In late May, its CEO Serge Toulekima told Reuters "Our strategy for growth is based on acquisitions and on going after marginal fields and going after permits that expire as well as exploration."
Declining production
The Gabonese government recognizes a chronic decline in output. A former OPEC member, Gabon now produces around 230,000 bo/d, down from a peak of 370,000 bo/d in the 1997, according to the US Energy Information Administration (EIA). Oil accounts for 80% of export earnings and contributes 50% of the country's gross domestic product.
Gabon's pre-salt Cretaceous play offers new potential revenue, and several seismic programs have recently been undertaken targeting the pre-salt. Ophir, Perenco, and Shell have drilled or plan to drill deepwater pre-salt wells in 2014.
All of this– eliminating bidders, uncertain petroleum code status– adds to confusion for operators seeking to do business in the country.
Map at right from Deloitte.
Related coverage at OE:
Ruche discoveries off Gabon declared commercial, 21 July 2014
Gabon well fails to deliver, 26 June 2014
Third Gabon well disappoints, 19 March 2014
Etame devt offshore Gabon on schedule, 28 February 2014
Ophir starts Gabon drilling, 18 February 2014
OMV takes Gabon stakes, 18 December 2013
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