Gabon seeks to reclaim Chinese oil assets

Listen to this article

00:00
00:00

Gabon is planning to take assets back from three international oil companies including a subsidiary of China’s Sinopec in a sign of Africa’s growing assertiveness as competition intensifies for its natural resources.

The move will exacerbate tensions over a lack of clarity in the terms and conditions of investment as Gabon prepares to launch a licensing round for the deep waters off its coast. Experts say reserves in the Gabon Basin could rival deep offshore discoveries in Brazil.

Tensions between the industry and Gabon’s oil ministry come as a number of African countries attempt to wrest better terms from foreign multinationals and clamp down on transfer pricing and tax evasion.

Etienne Ngoubou, oil minister, told the Financial Times the government plans to reclaim the main onshore site of China’s Addax Petroleum, the Tsiengui field, when the contract comes up for renewal in 2015, due to alleged breaches of contract.

Mr Ngoubou said the state had informed two other oil companies they faced similar action. “There will be a partial reclamation of assets,” he said. “The companies have realised we have proof of irregularities. (They) have recognised their fault.” The minister refused to identify the oil companies. It is understood that neither Total nor Shell are being targeted.

The move would follow Gabon’s controversial decision last year to strip Addax of its second field, Obangue, also for alleged breaches of contract. The assets are now managed by the recently-created national champion, Gabon Oil Company.

The minister said Addax had been in “flagrant non-respect of the law (on Obangue). We told them we would not renew Tsiengui for the same reasons.” Addax has launched legal action against the decision, and told the FT it had no intention of exiting the country.

Relations between the oil industry and ministry have deteriorated sharply. Companies complain they have been forced to negotiate on licences without a new hydrocarbon code which will set investment terms. They also complain that new conditions are imposed as contracts are renewed.

There are also suspicions that the ministry’s tougher approach is motivated by a desire to reallocate producing assets to GOC, which wants to take stakes in existing and new fields. Mr Ngoubou denies this.

Xref special report

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.