Shell back in Gabon: a new MoU raises old questions

This Tuesday, Shell and Gabon’s Ministry of Petroleum signed a memorandum of understanding. Many analysts see this as a strong signal that the country’s offshore oil sector is once again attracting major players. The British company follows two other giants: ExxonMobil and BP had already shown interest in deepwater zones less than a year ago. On the surface, it looks like Gabon is becoming a hot spot for big oil firms. But a careful reading tempers the enthusiasm.

The document is only a statement of intent, not a binding commitment. There is still a very long road ahead before any oil can actually be extracted and sold. Shell could easily change its mind later: if exploration results disappoint, if oil prices drop, or if a more profitable opportunity emerges elsewhere, the company can walk away without paying a penalty. This is not the first time Gabon and the British firm have crossed paths. Shell was already active in the country, then left in 2017 and pulled out completely by 2019. Its return today is driven by its own strategy, not by a desire to do Gabon a favour.

Yet on this very point, the government holds a slight advantage. It will need to negotiate wisely. What share of the revenue will go to the state? How many jobs and how much training for Gabonese citizens? And then comes the question of management: when the money starts flowing, how will it be safeguarded and invested in building the future rather than spent right away? Remember, commercial production is seven to fifteen years away at best. Budgetary and employment benefits would only be visible between 2033 and 2036. From seismic surveys to appraisal drilling, from reviving subcontracting chains to hiring young people, there is a lot of work ahead.

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Gabon is not the only African country facing this situation. Angola and Nigeria have negotiated such deals to maximize their benefits. Cost recovery thresholds, the state’s share based on profitability, transparency, and monitoring — nothing has been left to chance. The real challenge is not attracting Shell; it is the terms on which the company is welcomed.

While neighboring 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 perfectly well: it signs identical MoUs everywhere. What makes the difference is what the host country demands next.