- Steadily dropping since its peak in 1997, Gabon's oil production is finally experiencing a slight growth, new statistics reveal. In the same period, Gabon has been reduced from the third to the sixth largest oil producer in sub-Saharan Africa.
According to statistics released by the US government agency Energy Information Administration (EIA), Gabon's decrease in oil production has now stopped. During the first nine months of 2006, Gabon produced 237,000 barrels per day (bbl/d) of crude oil, EIA informs. This is a small increase from 2005.
Contrasted with Gabon's 1997 peak of 371,000 bbl/d, 2006 oil production however has declined by 36 percent. "In part, the decline in production is due to maturing fields and a lack of new fields coming online, something that Gabon is working to change over the next few years," the US agency explains. Despite these efforts, EIA however foresees further "looming oil export declines."
The main reason for Gabon's decreased oil production is found on its largest producing oil field, Shell's offshore Rabi-Kounga, which now only produces around 55,000 bbl/d. This is down from its 1997 peak of 217,000 bbl/d. In an effort to extend the productive life of the field, Shell in 2003 however began re-injecting associated natural gas into the field.
Apart from Rabi-Kounga, Gabon in fact has been successful in increasing its oil production during the last years. Given the current high world market prices, Libreville authorities have managed to recruit several smaller firms to bring new oil fields online in Gabon.
Vaalco, Addax Petroleum, and Sasol are involved in the Etame offshore field, with a current of approximately 18,000 bbl/d. In July this year, the independent oil company Addax Petroleum purchased the interests of Pan-Ocean Energy in Gabon for US$ 1.4 billion, illustrating that Gabon's oil sector still is capable of attracting large investments.
Further investments are also on track. Only last month, FirstAfrica Oil completed initial drilling in the offshore East Orovinyare oilfield. The company hopes to have production from the field online by the third quarter of 2007. Initial production is expected at over 7,000 bbl/d. Several onshore fields are also currently being explored, developed or expanded.
Gabon was hit hard by the declining oil production, with its highly ineffective administration being used to almost unlimited revenues. Despite its small population of about 1.4 million, limited social spending and a very slow progress in developing infrastructure, the Libreville government had accumulated a debt of around US$ 3.8 billion - debt payments now amounting to 40 percent of the annual government budget.
Faced with a financial crisis, Libreville during the last two years has reformed its economy, increased transparency, embraced good governance and achieved new oil investments. In 2005, Gabon finally experienced sustainable growth figures, with GDP increasing by 2.7 percent - around the same as population growth. Also inflation was reduced to close to nothing, following decades of hiking prices in the oil-driven economy.
In 2005, Gabon registered per-capita GDP of approximately US$ 5,000, which is significantly higher than the sub-Saharan African average of US$ 1,500. However, analysts estimate that 60–70 percent of Gabonese live below the poverty line despite forty years of large oil exports.
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