Lloyds List: World Bank agrees loan to help Gabon manage its oil: Country struggling to make the most of its natural resources set to receive $15m boost, writes Bruce McMichael: “Of the oil majors, Shell and Total have the greatest presence in the country, with Shell operating the largest field at Rabi-Kounga.”: Tuesday December 06, 2005
THE World Bank has given the green light to a $15m loan to support Gabon's efforts towards improved management of natural resources, including its oil sector.
The Natural Resources Management Development loan will support Gabon's implementation of its extractive industries transparency initiative in the oil and mining sectors, alongside a sector programme for forests, fisheries, biodiversity and environment.
Gabon's oil industry is blossoming in the shadow of its regional neighbours such as Nigeria and Equatorial Guinea, but is squaring up to the challenge of attracting new investment.
The country's Energy Ministry, led by Richard Onouviet, is seeking to reverse the slow decline in oil and gas production and is putting in place a series of development scenarios.
With the country's proven oil reserves currently estimated at around 2.5bn barrels, much more is needed from exploration work.
There is a sense of urgency around the Gabonese oil and gas industry, amid fears that without the discovery of new fields, current production will empty the known oil reserves within the next decade.
The country has no national oil company, preferring to work directly with multinational and domestic companies through the Energy Ministry.
Taking a regulatory role, the ministry supervises the exploration, development and producing activities of international companies.
The bulk of Gabon's crude oil shipments are exported to the US, the key market for many West African countries. Much of the remaining production is shipped to western Europe with an occasional tanker chartered to Asia.
Output peaked in 1997 at 370,000 barrels per day and has since declined to 260,000 bpd this year. The continued decline in output could be bad news for the country that is almost wholly dependent on oil revenues to fund its economy.
Of the oil majors, Shell and Total have the greatest presence in the country, with Shell operating the largest field at Rabi-Kounga.
Smaller investments are held by international independents PanOcean, Vaalco and Sasol, while the government is working with companies such as Tullow Oil and Canadian Natural Resources to promote production-sharing agreements and exploration permits.
Production at Vaalco Energy's Etame field off Gabon is steadily increasing as the US operator develops satellite fields to the Petroleo Nautipa floating production, storage and offloading vessel, which will be on station until 2012.
Hydrocarbons production in Gabon is dominated by oil, but many observers believe there are large gas resources that lie undiscovered and untapped with the country's land and offshore areas.
Gabon has known natural gas reserves of 1.2trn cu ft but production is limited, with the bulk of produced gas burnt to generate electricity or to power the Sogara refinery at Port Gentil.
Rabi-Kounga is Gabon's largest oil field and currently produces 55,000 bpd, down from its 1997 peak of 217,000 bpd.
In order to increase production, Gabon's Oil Ministry has increased the number of production sharing agreements and exploration permits offered to investors.
In its last formal licensing round, held between April 2000 and January 2001, Gabon offered 27 blocks but response from international petroleum companies was disappointing.
Since then, the government has successfully focused on smaller independent firms and Chinese companies, including Sinopec, in promoting exploration rights.
It is likely that more oil and gas will be found within the country's borders.
However, the race is on to find it and sustain the existing infrastructure long into the future.
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