As the contract dispute continues to progress with Gabon's oil ministry, Addax Petroluem, owned by China Petrochemical Corp. (Sinopec), risks losing control of another oil field in the small, west-African country.
Gabon already seized back control of the Obangue field in January 2013, and Etienne Ngoubou, the Gabonese Oil Minister has now said that he will not renew Addax's production license at the Tsiengui field due to a breach of the law, effectively handing control of the field to the Gabon Oil Co.
Bloomberg reports that two other oil companies working in Gabon face similar actions, leading to the possibility that it is all part of some ploy by the government to increase its revenues from oil whilst prices are high. Laban Yu, an analyst at Jeffries Group, explains that "when some of these assets were acquired, oil prices were low, and now prices are higher. Maybe the government is hoping to get a larger share of profits."
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Addax Petroleum is now stating that the Gabonese government was in breach of contract when it took the Obangue field from them in January.
Michael Wora, a technician at Obangue, told Bloomberg that since Gabon Oil Co., which was only created in 2011 to manage Gabon's oil assets, took control, working conditions have deteriorated. "The production of Obangue dropped since January 2013 from 12,000 barrels a day to less than 6,000 barrels. Communities living around Obangue lost their benefits on health care, transportation. The majority of employees wish to leave the Gabon Oil Company and work with Addax."
Three judges have been appointed to oversee the dispute.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More