Last Tuesday, Shell and Gabon’s Ministry of Petroleum signed a memorandum of understanding. For many analysts, this agreement sends a strong signal about the country’s appeal and its offshore oil potential. The British company follows in the footsteps of two other industry giants—ExxonMobil and BP had shown interest in deepwater oil zones less than a year earlier. This suggests Gabon is once again drawing the attention of major oil firms. However, a closer look tempers the overall excitement.
This document is merely a statement of intent, not a binding commitment. A long road remains before any oil can actually be extracted and sold. Shell could easily change its mind later: if exploration results are poor, if oil prices drop, or if a more profitable country emerges, it can walk away without any penalty. This is not the first time Gabon and the British firm have crossed paths. Shell was previously active in Gabon, left in 2017, and made a final exit in 2019. Its return today is primarily driven by its own corporate strategy, not by a desire to do Gabon a favor.
And it is precisely here that the government holds some leverage. It will need to negotiate skillfully. What share of revenue will go to the state? How many jobs and training opportunities for Gabonese citizens? Then comes the question of management. When the money arrives, how will it be safeguarded and invested in building the future, rather than spent immediately? Keep in mind that commercial production is seven to fifteen years away. Budgetary and employment benefits would not be visible until at least 2033 or 2036. Between seismic surveys, appraisal drilling, reactivating subcontracting chains, and creating youth employment, there is much work to be done.
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Gabon is not the only African country facing this situation. Angola and Nigeria have negotiated to maximize benefits from such transactions. Cost recovery thresholds, state share based on profitability, transparency, and monitoring—nothing was left to chance. The issue is not attracting Shell; the issue is on what terms.
While neighboring countries are tightening rules to convert oil revenues—especially from offshore—into real development, Gabon appears to be negotiating with the same tools that led to failures over the past three decades. Shell knows this well: it signs identical MoUs everywhere. What changes is what the host country then demands.
