Shell returns to Gabon but questions remain

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 and its offshore oil potential. Especially since the British company follows two other giants. Less than a year earlier, ExxonMobil and BP had already shown interest in deepwater oil zones. This suggests that Gabon is once again a promising destination for major 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 easily change its mind later: if exploration results are poor, if oil prices drop, or if it finds a more profitable country, it can walk away without any penalty. This is not the first time Gabon and the British company have intertwined their futures. Shell was already present, then left Gabon in 2017 and definitively in 2019. If it returns now, it is primarily because it suits its own strategy, not to do Gabon a favour.

And it is precisely here that the government holds a slight advantage. At this stage, it must negotiate skillfully. What share of the revenue will go to the state? How many jobs and training opportunities will be created for Gabonese citizens? And then comes the issue of governance. When the money arrives, how will it be safeguarded and used to build the future, instead of being spent immediately? For context, it takes between seven and fifteen years before any commercial production begins. Budgetary and employment benefits would only become visible between 2033 and 2036 at best. Between seismic surveys, appraisal drilling, reactivating subcontracting chains, and youth employment, there is much to do.

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Gabon is not the only African country facing a similar situation. Angola and Nigeria negotiated in ways that maximised benefits from such transactions. Cost recovery thresholds, state share based on profitability, transparency and monitoring—nothing was left to chance. The problem is not attracting Shell; the problem lies in the terms of the deal.

While neighbouring countries tighten their rules to turn oil profits, especially offshore, into real development, Gabon seems to be negotiating with the same tools that led to failures over the past thirty years. Shell knows this well: it signs identical MoUs everywhere. What changes is what the host country demands next.