London — A failed coup attempt in Gabon, OPEC's second smallest producer, has raised the prospects of further supply risks to the producer group's growing African base.
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Government authorities on Monday arrested a key military rebel and killed two of his commandos, after six troops earlier in the day stormed a state radio station and called for a popular uprising, according to local reports.
Market sources said there were no apparent disruptions to Gabon's oil production and exports, but any wider impact would have been limited anyway, as the country pumped just 180,000 b/d in November, according to an S&P Global Platts survey of OPEC production.
Still, the attempted coup adds to the instability surrounding the West African country, at a time when it is courting investment to boost its flagging oil industry. Production reached a peak of 365,000 b/d in 1996 but has since steadily declined mainly due to the maturing fields and also because of a lack of any significant oil projects over the past decade.
Gabonese oil ministry officials could not be reached for comment.
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Oil major Shell in 2017 sold off its onshore interests in Gabon to a private equity startup backed by the Carlyle Group, while Total also has divested several of its assets in the country to Anglo-French company Perenco.
The former French colony, which rejoined OPEC in 2016 after a 20-year absence, is also frequently subject to strikes by its oil workers union, the National Petroleum Workers Union (Onep), which has had long-standing grievances with the government and oil companies over employment terms.
Onep called a three-day strike on December 11 at Gabon's oil facilities to call for better living conditions for employees in the oil sector, which accounts for about half of the government's revenues and 80% of its exports.
To address the slide in production, Gabon has revised its hydrocarbon code, eliminating the corporate tax for producing oil companies. Officials hope this will boost interest in its 12th offshore licensing round, which consists of 11 shallow and 23 deepwater blocks.
Oil minister Pascal Houangni Ambouroue has said the round will close in April and the final list of winners should be announced by November.
Gabon exports six main crude grades. The two medium sweet flagships are Rabi Blend and Rabi Light and make almost half of the country's exports.
Other export grades include Oguendjo, Lucina, Etame and Mandji, also medium-to-heavy sweet grades that attract a broad set of buyers, including refiners in Australia, France, Malaysia and Trinidad & Tobago.
The country also hosts one refinery, Sogara, with a capacity of 24,000 b/d, though it is often hampered by maintenance issues.
Monday's coup attempt appeared to stem from frustration over the long rule of President Ali Bongo, who narrowly won reelection in 2016 amid accusations of fraud and corruption. Bongo, who succeeded his father's near-40-year rule, is recuperating in Morocco from a stroke he reportedly suffered in October.
Though the situation appears contained, Tamas Varga, an analyst with brokerage PVM Oil Associates, said the incident could contribute to a rising geopolitical premium in the oil.
Given the president's ill health, groups are jockeying for power in the country. Spillover unrest from the neighboring Democratic Republic of Congo following its disputed elections could also impact Gabon and fellow OPEC member Republic of Congo.
OPEC's footprint in Africa has been growing in recent years. Equatorial Guinea joined the group a year after Gabon in 2017 and the Republic of Congo is OPEC's newest member, signing up in mid-2018.
Meanwhile, nearby Nigeria appears to be once again facing restive militant groups that could threaten oil production there. Libya is also maintaining a force majeure at its largest oil field, Sharara, while Venezuela continues to see its output drop due to its economic crisis and Iran struggles to find customers in the wake of US sanctions reimposed in November.
OPEC in December agreed to cut 1.2 million b/d in supplies for the first six months of 2019 to shore up oil prices amid expected tepid global economic growth.
Under the deal, Gabon's quota is 181,000 b/d, which would be a 6,000 b/d cut from the October level from which the quotas were determined.
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