OBG talks to Serge Toulekima, Managing Director, Gabon Oil Company (GOC)

Interview: Serge Toulekima

What has been the government’s role and objectives in establishing the GOC?

SERGE TOULEKIMA: GOC is a state oil company, with the Gabonese government as the sole shareholder. The company was created in August 2011 by presidential decree. The company was set up for the exploration and production of hydrocarbons, to market oil and to play an active role in downstream activities as well. We will also be looking at creating partnerships to enter into the transport and distribution of petroleum products. GOC will be managing the state’s ownership in all the oil-producing fields, and it will acquire its own stake in assets that it deems in line with the company’s growth strategy.

How does GOC plan to acquire more exploration blocks and producing assets?

TOULEKIMA: We are in the process of finalising important negotiations with the Ministry of Petroleum to acquire a number of exploration blocks in conventional zones. We are actively talking to other operators for farm-in opportunities. We are also looking at blocks that are being relinquished by other operators. In terms of production, our strategy is to first focus on marginal fields in conventional areas. This will allow us to develop our operational capabilities in low-complexity areas.

Deepwater zones, especially the sub-salt area, which has not yet been extensively explored, are on our radar as well. However, development costs in these areas are generally very high. As a start-up, we have to focus on goals that are easily reachable and that match our financial muscle.

What kinds of partnerships does GOC envision?

TOULEKIMA: We will pursue the classic partnerships that are found in most production sharing contracts through farm-in. As I said earlier, we are in the process of finalising a few contracts, and we will be looking for partners that want to join us. We are also creating a number of subsidiaries in partnership with other companies. The transport of petroleum products and oil marketing are two examples.

How can the decline in oil production be slowed and additional investment encouraged?

TOULEKIMA: First, it is important to maximise the production of existing assets, through the application of new technologies, or by looking at methods of improving recoveries. Most oil reservoirs in Gabon have high permeability and strong aquifer support, which generally favours high recovery factors. My challenge to every operator in Gabon is to deliver at least a 50% recovery factor on existing assets. Second, we have to do our best to make sure that every marginal field is brought on-stream. Third, we need to keep exploring. You do not find oil by studying things to death. You need to drill wells to find oil. There will be failures in some of the exploration wells, but a couple of dry holes should not defeat our resolve to explore. Note that the sub-salt areas can be a game changer. Just look at what is happening in Brazil. Finally, the state must play an active role by ensuring that fiscal terms are designed such that investments in producing fields and exploration are always rewarded. In summary, I will say three things: let’s make the most of what we have, let’s keep exploring and let’s have incentives for investments.

How will GOC’s entrance into Gabon’s oil market affect companies already operating here?

TOULEKIMA: Existing operators should not view GOC as a threat, as the government is not planning to nationalise the oil and gas industry; the state just wants to make sure that Gabon’s oil revenues are maximised. Actually, the creation of the company is good news for these operators, as they stand to gain from partnering with us. I cannot see a better scenario than approaching the government with a partner in which the state is the majority shareholder.