Last Tuesday, Shell and Gabon’s ministry of petroleum signed a memorandum of understanding. For many analysts, this signature is a powerful signal of the country’s attractiveness for offshore oil. Notably, the British company follows two other giants: ExxonMobil and BP had already shown interest in deepwater oil zones less than a year earlier. This suggests Gabon is once again becoming a destination of interest for major firms. However, a closer look tempers the general enthusiasm.
This document is merely a declaration of intent, not a firm commitment. There is still a long road ahead before any oil can actually be extracted and sold. Shell could easily change its mind later: if research results are poor, if oil prices drop, or if it finds a more profitable country, it can walk away without any penalty. This is not the first time Gabon and the British company have linked their fates. Shell was already present, then left Gabon in 2017 and definitively in 2019. If it returns now, it is primarily because it fits its own strategy, not to do Gabon a favor.
And it is precisely on this point that the government is, to some extent, in a position of strength. At this level, it will need to negotiate skillfully. What share of the revenue will go to the state? How many jobs and training opportunities for Gabonese citizens? And then the next challenge is its own management. When the money arrives, how will it be safeguarded and used to build the future, rather than spent immediately? For context, it takes between seven and fifteen years before any commercial production begins. Budgetary and employment benefits would only become visible between 2033 and 2036 at best. Between seismic campaigns and appraisal drilling, reactivating subcontracting chains, employing young people, there is so much to do.
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Gabon is not the only African country facing this situation. Angola and Nigeria have negotiated in ways that maximize benefits from such transactions. Cost recovery thresholds, state share based on profitability, transparency and monitoring – nothing was left to chance. The problem is not attracting Shell; the problem is knowing under what conditions.
While neighboring countries are tightening their rules to transform oil profits, especially offshore, into real development, Gabon still appears to be negotiating with the same tools that led to failures over the past three decades. Shell knows this perfectly well: it signs identical MoUs everywhere. What changes is what the host country imposes afterward.
