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The New Bear Market In Oil

The New Bear Market In Oil

Many factors that boosted oil…

Gabon Starts Offshore Licensing Round, Looks To Scrap Corporate Tax

offshore rig work boat

Gabon has launched a new offshore exploration licensing round for 34 oil and gas blocks and plans to soon enact new legislation that would scrap the 35-percent corporate tax on energy companies, Gabon’s Oil Minister Pascal Ambouroue said at an oil conference on Wednesday.

OPEC member Gabon, a country on Africa’s West Coast, wants to attract more investors to its oil and gas industry and is currently overhauling its energy legislation to replace the 2014 petroleum code.

Gabon is a small crude oil producer—only neighboring Equatorial Guinea pumps less oil than Gabon within OPEC. Gabon’s crude oil production has averaged around 187,000 bpd so far this year, according to OPEC’s secondary sources.

Gabon’s new law would set a minimum royalty rate of 7 percent for conventional offshore oil and of 4 percent for gas. For deepwater and ultra-deep waters, the royalty rates would be 5 percent for oil and 2 percent for gas, according to Bernardin Assoumou, the director general of hydrocarbons.

“The new hydrocarbon code is adopted for oil price fluctuations, gives flexibility to different plays and field sizes ... and the objective is to attract international oil companies,” Reuters quoted Assoumou as saying.

According to the oil minister, Gabon’s new petroleum code will likely become law by the end of December.

“Marginal fields development by small independents sustain production now and production will decline below 150,000 barrels a day if nothing is done,” oil minister Assoumou said at the Africa Oil Week conference in South Africa.

Africa is currently enjoying a revival of offshore and onshore drilling, with oil and gas rigs in the continent at a three-year high, according to Baker Hughes. U.S. supermajor Exxon is also betting on western and southern Africa to explore for the next big find, with stakes in oil and gas prospects in Ghana, Mauritania, Namibia, and South Africa.

By Tsvetana Paraskova for Oilprice.com

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