Royal Dutch Shell has confirmed that it is to sell oil licence blocks in Gabon following the company’s divestment plan in the region.
Gabon’s president Ali Bongo said the company is pulling out of onshore oil developments as part of a move to survive amid a global oil glut.
“What we’re going through now, everybody is trying to cut expenses”, he said.
Shell Confirms Divestment In Gabon
The president explained that Shell’s assets will probably be sold to Middle Eastern, European and American companies already bidding for them. He did not specify the assets, their value or output, but confirmed there are buyers interested.
Shell has been active in Gabon since the 1960s and is one of the biggest investors in the country’s oil and gas sector.
The downfall in crude oil prices has been hard on several African countries and Gabon is no exception. According to Moody’s, “the expectation is that the government’s finances will continue to deteriorate in 2016”.
Shell is planning to spread its divestment programme over the next three years. According to CEO Simon Henry, sales this year are more likely to focus on assets such as refineries because oil fields are less valuable and will result in a lower sales price.
“We are working on a series of packages, but we’re not about to jump into a fire sale, into a market that is clearly weak at the moment”, he said.
Gabon Could Rejoin OPEC
Meanwhile, Gabon is in talks to rejoin the Organisation of Petroleum Exporting Countries (OPEDC), which it left in 1995.
“These are our former partners, so we know them very well, and yes, we’re talking”, the president stated. “It’s not so much about influence, as the common effort we should all be doing to protect the market”, he added.Last updated on 06:33PM - 24/06/16