Gabon prepares an oil code reform to attract offshore investment

Gabon is studying changes to its petroleum framework to improve the attractiveness of deepwater exploration. Presented at African Energy Week 2026, recommendations prepared with Wood Mackenzie address fiscal mechanisms, the state's share and administrative barriers. They remain proposals under examination: the government has not announced final adoption. This distinction is essential for investors and public partners alike, because project terms will depend on the text ultimately approved.

The reform comes as Gabon seeks capital to replenish reserves and develop more complex offshore resources. The country highlights substantial sedimentary acreage still open for exploration, but competition for international budgets is strong. Companies compare geological risk, drilling costs, taxation and the ease of advancing a project from discovery to production.

A debate over value sharing

The advisory work presented in Cape Town lasted around four to five months. Recommendations include a production-sharing approach based on the project's rate of return, or “R-factor”. The mechanism would adjust the state's share according to cumulative revenues and investment, rather than relying solely on parameters linked to production volumes. In the scenario discussed for certain ultra-deepwater projects, the proposal would retain a 19% royalty and a minimum state share of 20%.

The stated objective is to balance remuneration for the operator's risk with public revenues. Deepwater drilling requires high spending and can involve substantial risk before any discovery. If the fiscal regime is perceived as too rigid, an operator may defer a project or allocate its budget to another region. Conversely, overly generous concessions can reduce public revenues without guaranteeing activity or additional production.

A progressive mechanism can offer greater flexibility, but requires transparent calculation rules, verifiable data and strong administrative capabilities. Institutions must be able to audit declared costs and realised revenues, while contracts must specify how price changes are accounted for. Without these safeguards, the mechanism's complexity could create new uncertainties rather than reduce them.

Administrative barriers also matter

Attractiveness does not depend exclusively on tax rates. Permitting times, data availability, coordination among ministries and predictable obligations influence exploration decisions. Slow procedures can tie up capital and delay drilling campaigns, particularly when specialised vessels and equipment are committed across several countries.

Gabon also wants to make better use of mature fields and marginal assets. These projects can offer additional production opportunities to independent operators with cost structures and strategies different from those of major companies. Agreements covering fields at the end of plateau production, infrastructure access and incremental production incentives could therefore complement the search for new deepwater discoveries.

This approach requires coordination between new blocks and existing facilities. Discovered resources become commercially viable only if evacuation and processing solutions are available. Decisions on pipelines, floating units or shared infrastructure must therefore be examined alongside licensing terms. This planning can reduce costs and improve commercialisation prospects.

A portfolio of blocks to promote

The country said 26 blocks were available and nearly 72% of its sedimentary basin remained open. These proportions highlight exploration potential but do not guarantee commercial reserves. Investors will request high-quality data, cautious estimates and a clear understanding of risks. Cooperation agreements recently initiated with Shell, alongside discussions with other major operators, can help sustain interest, subject to a clear framework.

Global competition for offshore capital remains intense. Projects in Angola, Namibia, Senegal, Mauritania and other emerging basins also offer opportunities. To convince investors, Gabon will need to show that announced changes deliver tangible improvements in processing times, legal certainty and development conditions.

From proposed reform to implementation

Government examination will be the next milestone. Once proposals are finalised, companies will need to know which rules apply to new blocks, existing contracts and additional investments. Consultation with operators, civil society and administrations can help clarify objectives and improve risk allocation.

Reforms cannot be assessed solely by the number of contracts signed. Success must be measured through exploration activity, investment actually committed, commercialised production and public revenues generated. Local training, Gabonese businesses' access to service contracts and management of environmental impacts will also remain decisive criteria.

The approach presented at AEW aims to position Gabon in the competition for offshore exploration. It opens a useful debate about adapting the petroleum regime to projects' economic realities while keeping the national interest in view. But until approved and implemented, the recommendations remain a working proposal. Investor confidence will depend on consistency among announcements, legislation and operational decisions.