Etienne Dieudonné Ngoubou, Minister of Petrol and Hydrocarbons: Interview

Interview: Etienne Dieudonné Ngoubou

What are the prospects regarding the exploration of deep and ultra-deep offshore blocks?

ETIENNE DIEUDONNE NGOUBOU: The current drop in oil prices has pushed companies and countries to seek cost reductions in an effort to increase their margins in extractive activities. Of course, this does not favour exploration, especially in regard to deep offshore projects. However, lower prices also drive down the cost of factors of production, so we encourage companies to take advantage of this period of low prices to invest.

Ultimately, the attractiveness of a country’s hydrocarbons sector lies primarily in three elements: political stability, new discoveries, and attractive economic and fiscal conditions. In this regard, Gabon is well positioned, given recent solicitations from oil companies looking to enter the sector.

Due to high capital demands, operations in deep and ultra-deep blocks in the Gabon basin – which exhibit high exploration risks – require the presence of major oil companies that can guarantee their success. The deep-water drilling campaign led between 2013 and 2014, which culminated in the discovery of gas by Shell, has revealed the existence of a petroleum system. This was followed by an appraisal campaign, started in 2016, seeking to better evaluate the related gas reserves. The recent contracts signed in 2014 for deep-water exploration allow us to project at least seven drilling operations for 2017-19. These drillings, primarily focused in Gabon’s Southern basin, could be strategic and decisive for the future of the country’s offshore ambitions. In terms of outlook, the production phase of current or future discoveries could start between 2021 and 2025.

What investments are necessary to increase production at Gabon’s mature fields?

NGOUBOU: The increased production of mature blocks necessarily entails the rational management of oil deposits and, most notably, the modernisation of operations, the use of enhanced recovery techniques, and new methods and technologies, such as intelligent wells. In parallel, the state must provide incentives for operators, by granting exploration permits close or adjoined to oil infrastructures that allow them to lead aggressive exploration campaigns and exploit deposits with minimal delays.

How can Gabon encourage gas production?

NGOUBOU: Traditionally, oil operators have prioritised crude production above the commercial exploitation of associated gas. The 450 km of pipelines that allow Perenco to serve Port-Gentil and Libreville with non-associated gas, the treatment station of Batanga for dehydration and stabilisation or Total’s network of pipelines serving Port-Gentil, exemplify the challenges being overcome to make adequate use of our natural resources.

However, we still see a lack of investment in the transport and treatment infrastructures necessary for the commercialisation of associated and non-associated gases. Indeed, in Gabon, where resources are scattered and hold small volumes, gas investments are onerous and present returns which may disqualify them from operators’ plans, especially given the global environment.

Challenges include the need for a better evaluation of national gas resources, as well as the identification of industrial outlets in the production of electricity, petrochemicals or gas-to-liquids products. The state will need to identify the projects with scales compatible with our associated gas reserves. Recent technological advances, which point towards a reduction in the size of gas treatment units, also offer new possibilities for national and international operators.

We must develop an ambitious gas policy that will cover the sector’s main concerns, by reassuring operators of the conditions related to the commercialisation of gas with regard to taxes, tariffs and licences.