Gabon postpones oil block auction, interest grows

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Gabon has postponed a planned May 5 auction of 42 offshore oil exploration blocks to accommodate greater than expected international interest in the assets, its energy ministry said.

Africa’s seventh biggest crude oil producer is seeking to offset the long-term decline in output from its main wells with supplies from the new offshore finds, and is in competition with regional neighbours to attract investment.
“The demand was growing so much that May 5 seemed too tight,” Mines, Oil and Energy Minister Julien Nkoghe Bekale said in a statement made after the cabinet decision late last month and verified by Reuters last week.
“We are going to travel across the world to meet as many operators as we can,” said Bekale, adding that the blocks showed similarities with those of major offshore finds in Brazil.

Bekale did not give a new date for the auction. He said the delay would allow the auction to be marketed to potential investors in Paris, Houston, Singapore, Calgary and London among other cities.

Gabon said last month it would limit its share of oil output from the soon-to-be opened offshore exploration blocks to 62.5 % as part of an effort to draw major international firms.

Gabon is competing to offer better terms than African producers such as Cameroon and Equatorial Guinea to lure international investment.

Gabon produces roughly 250 000 barrels per day of crude oil and relies on energy for the bulk of its revenues. However output has been declining for more than a decade after hitting its 350 000 barrels per day peak.

A Gabonese energy ministry official told Reuters last month that in addition to royalties and production costs, Gabon would seek a 50 % share of production for fields producing up to 75 000 bpd, 52 % for fields of 75 001-150 000 bpd, 55.5 % for fields of 150 001-250 000 bpd, and 62.5 % for fields of 250 001-300 000 bpd.

Gabon’s oil sector is one of the continent’s most mature and already home to international companies including France’s Total and Royal Dutch Shell.



Source: www.af.reuters.com