Oil remains vital to Gabon's economy

Approximately one-third of Gabon’s national budget still relies on oil, a sector experiencing a decline in production. This has prompted the country to prepare new contracts to revive investment in this crucial economic sector.

Wood Mackenzie proposes revenue reform

The British firm Wood Mackenzie has suggested a reform of how Gabon shares oil revenues, particularly for offshore production. These recommendations were presented on October 14 in Cape Town by David Parkinson, vice-president Upstream of the firm, during the African Energy Week (AEW).

New contracts with major oil firms

Gabon is working on a new hydrocarbons code and is set to sign several contracts with major oil companies. ExxonMobil signed a memorandum of understanding in October 2025, followed by Shell and BP in June and October of last year, respectively.

Preliminary agreements to become binding

Gabon’s minister of Petroleum and Gas, Clotaire Christian Nzamba Nguema, announced in April that these preliminary agreements, which are not yet binding, should be converted into production sharing contracts (PSC) within four to six months.

Oil production continues to decline

Gabonese oil production fell by 8.7% year-on-year in the first quarter of 2026, according to the General Directorate of Economy and Fiscal Policy. The 2027 budget bill, adopted on September 18, anticipates a 9% decline in oil revenues, assuming a barrel price of 70 dollars.

Focus on ultra-deep water projects

Wood Mackenzie’s proposal specifically targets ultra-deep water fields, which are the most expensive to develop but on which Gabon is placing its bets to reverse the production decline. The firm suggests a mechanism called the “R-factor,” which adjusts the state’s share based on the project’s actual profitability.

Proposed changes to revenue sharing

The firm recommends maintaining a 19% royalty paid to the state on the value of extracted oil. It also proposes a guaranteed minimum share of 20% for the state on the remaining oil after investment costs are reimbursed. However, signing bonuses, typically included in PSCs, would be eliminated to reduce the entry cost for ultra-deep blocks.

Gabon has multiple available blocks

According to the firm, Gabon has 26 available blocks, mainly on land and in shallow waters. The adoption of the new hydrocarbons code and its impact on contracts with BP and ExxonMobil, expected in the coming weeks, will indicate how these proposals are received.

Angola’s reforms offer a model

In Angola, similar reforms initiated in 2018 have helped stabilize production at around 1.1 million barrels per day, according to the African Energy Chamber (AEC). This provides a potential reference point for Gabon’s strategy.