Shell’s Gabon return raises hopes and questions

Last Tuesday, Shell and the Ministry of Petroleum signed a memorandum of understanding. For many analysts, this signing is a strong signal of the country’s attractiveness, especially for its offshore oil. The British company follows in the footsteps of two other giants. Less than a year ago, ExxonMobil and BP had also shown interest in deepwater oil zones. This suggests that Gabon is once again becoming a promising destination for major companies. However, a closer reading tempers the overall enthusiasm.

This document is merely a statement of intent, not a firm commitment. There is still a long road ahead before oil can actually be extracted and sold. Shell could later change its mind: if research results are poor, if oil prices drop, or if it finds a more profitable country, it can withdraw without any penalty. This is not the first time Gabon and the British company have crossed paths. Shell was previously present, then left Gabon in 2017 and definitively in 2019. If it returns now, it is above all because it aligns with its own strategy, not as a favor to Gabon.

And it is precisely on this point that the government has some leverage. 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? And then there is the question of its own management. When the money arrives, how will it be safeguarded and used to build the future, rather than spent immediately? As a reminder, it takes between seven and fifteen years before any commercial production. Budgetary and employment benefits would only be visible between 2033 and 2036 at best. Between seismic campaigns and appraisal drilling, reactivating subcontracting chains, youth employment, there is 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, etc. Nothing was left to chance. The problem is not attracting Shell; the problem is the terms.

While neighboring countries are tightening their rules to turn oil profits, especially offshore, into real development, Gabon appears to be negotiating with the same tools that have led to the failures of the past thirty years. Shell knows this perfectly: it signs identical MoUs everywhere. What changes is what the host country then imposes.