Shell’s return to Gabon: a cautious welcome or a risky bet?

Last Tuesday, Shell and Gabon’s Ministry of Petroleum signed a memorandum of understanding. For many analysts, this signature sends a strong signal about the country’s attractiveness for offshore oil. The British giant follows in the footsteps of two other majors. Less than a year ago, ExxonMobil and BP had already shown interest in deepwater oil zones. This suggests that Gabon is once again becoming a promising destination for big oil companies. However, a closer look tempers the general enthusiasm.

This document is merely a declaration of intent, not a firm commitment. There is still a very long road ahead before any actual oil extraction and sales can begin. Shell could later change its mind: if exploration results are poor, if oil prices drop, or if it finds a more profitable country elsewhere, it can walk away without any penalty. This is not the first time Gabon and the British company have intertwined destinies. Shell was already present, then left Gabon in 2017 and permanently in 2019. If it returns today, it is primarily because it suits its own strategy, not to do Gabon a favour.

And it is precisely on this point that the government holds a slight 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 there is the matter of 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 become visible between 2033 and 2036 at best. Between seismic campaigns and appraisal drilling, reactivating subcontracting chains, youth employment, there is much to be done.

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Gabon is not the only African country facing this situation. Angola and Nigeria have negotiated in such a way as to extract maximum benefits from this type of transaction. Cost recovery thresholds, state share based on profitability, transparency and monitoring — nothing has been left to chance. The problem is not attracting Shell; the problem is knowing under what conditions.

While its neighbours are tightening their rules to turn oil profits, especially 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 perfectly well: it signs identical MoUs everywhere. What changes is what the host country imposes later.