Interview: Etienne Dieudonné Ngoubou
What measures are planned in the new hydrocarbons code to ensure better integration of small and medium-sized enterprises (SMEs)?
ETIENNE DIEUDONNÉ NGOUBOU: The new hydrocarbons code, launched by President Ali Bongo Ondimba in the Emerging Gabon development plan, has three main objectives: optimise petroleum revenues, promote an industrial fabric in the sector and strengthen national capacities. The first is intended to attract investors in the hydrocarbons sector. Besides exploiting petroleum, revenue optimisation will involve the development of value-added activities in the hydrocarbons chain.
The second axis seeks to raise up national champions in the industry that will eventually help Gabon’s SMEs with the modalities of subcontracting. In this regard, the creation of the Gabon Oil Company (GOC) is helping us master the value chain and maximise revenues to better finance economic growth within the development plan. Subcontracting will help develop local employment and boost revenues, eventually benefitting other sectors. This policy led the country to hold a National Forum for Petroleum Subcontracting in May 2014, which produced some key recommendations to be implemented by the state. The ambition of boosting production necessarily involves promoting SMEs, especially for subcontractors. This will in turn accomplish the third objective and boost job opportunities.
How will the new Mandji refinery affect exports and what steps can ensure its long-term viability?
NGOUBOU: At the New York Forum Africa 2013, Gabon announced an agreement with Gunvor aimed at developing a hub for refined products. The signing of this partnership is in line with the president’s ambitions for the hydrocarbons sector. Petroleum will remain a cornerstone of the Emerging Gabon policy and will bring fresh revenues and improvements to the country. The new refinery, located on the island of Mandji, is key to Gabon’s vision. Gabon has ample experience as an oil-producing country and will take advantage of this expertise to ensure its viability for the long term, adopting modern and efficient equipment.
What measures have been implemented to encourage investment in deep-water offshore areas?
NGOUBOU: It is important to know that the current legislation in force for the hydrocarbons sector dates from 1960 and that the last changes to it were adopted during the 1980s. Certainly the regulation for this sector had become obsolete and no longer corresponded to today’s reality. It was the contracts that compensated for the lack of framework.
Tax measures, despite taking the spotlight in the new hydrocarbons law, have not changed much from the previous version. The state is allowed to hold up to a 20% stake in all licences and the GOC is authorised to acquire a stake of 15% at a market price.
The new law also clarifies the roles of certain players in the sector, especially that of the regulator, which will monitor the sector in the interests of all. It also introduces the contracts that will be offered to operators and the required administrative authorisations. In short, the new law aligns Gabon with international standards.
What is Gabon’s potential for natural gas resources?
NGOUBOU: In 2012 our country was honoured by the World Bank for its policy of reducing gas flaring, a welcome recognition from the international community. Moreover, our strategy for gas will be hastened by the promotion of value-added industries such as electricity and petrochemicals. Our current industrial policy, especially in Port-Gentil, will contribute to better gas usage and a considerable increase of resources for our economy, via a scheme focused on natural gas and hydroelectric sources, which are environmentally cleaner and much more price competitive. Given current reserves at 10% probability levels, Gabon’s potential for gas production is estimated at 1.7m cu metres a day for a 14-year period. We are now planning a comprehensive study to determine resources more precisely.
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