Asara Energy, one of Gabon's biggest oil companies, has gone through turbulent times. The original owner, the US asset management giant Carlisle, agreed to sell the company to French oil company Maurel & PROM in August 2023.
However, the state-owned Gabon oil company exercised its “first right” and jumped in to acquire Asara, which produces around 20-25% of Gabon's oil. The $1.3 billion acquisition was completed in June last year.
Edgar MBA Ognane, Managing Director of Assala Gabon, tells African businesses that the company's foundations continue to be strong despite questions about whether GOC has the expertise in managing oil exploration and production companies.
“What's not changed is the company's DNA,” he says. “We are maintaining high operation because it was important to show that state ownership was not downgraded in terms of compliance, governance and operational standards of all kinds.”
MBA Ognane says the company's current priorities are that oil flows from the discovery of N'Gongui, along with maximizing production from its current business. He is confident that Assara is on track to meet his ambitions to start production from the field next year. N'Gongui is ultimately set to produce 15,000 barrels per day. This is about 7% of Gabon's current oil production of 210,000 barrels.
Meanwhile, Assala is looking for further discoveries in three onshore blocks that hold exploration licenses. MBA Ognane said Assala's recent acquisition of drilling company SMP is a “game changer” in its exploration efforts and will also help increase production from existing sectors.
A key change due to GOC control is that Assala is funding its activities from its own cash flow.
“We were told not to rely on RBL (reserve-based lending) loans to function. This means we have to ask for our own funds and our own funds,” says MBA Ognane. However, he argues that this financial discipline does not hinder future growth.
“We spend more CAPEX than ever before. We are currently a company looking for a much longer-term future,” he says.
“Listing Ears” from the State
The preemptive right to allow the government to intervene and purchase oil and gas assets before one company sells to another is generally included in contracts between the government and the oil company. However, these rights are very rarely exercised in Africa.
Gaboné's Bryce Oligui Nuguema, who took power in a coup two years ago, presented the acquisition of Asara through the state's preemptive rights as a victory for Gabon's economic sovereignty. The state has a direct share of 25% in the company, with the remaining 75% being held by the state-owned GOC.
However, the acquisition has become possible, as Switzerland-based commodity trading company Gunvor provided the majority of its funding. A source familiar with the deal told S&P Global Commodity Insights in June 2024 that Gunvor had provided $800 million in funding for the deal.
MBA Ognane claims Gunvor has no stakes in Assala. He makes it clear that Gunvor will be able to trade crude oil as Gunvor only has a marketing agreement with GOC.
Assala will need to compete with several major international oil companies present in Gabon (including Totalenergies and Perenco), but for new exploration licenses, MBA Ognane says the company can benefit from the state's “listening ears.”
Under former President Ali Bongo, Gabon has begun several efforts to plan the future after oil. His “Emerging Gabon” plan, launched in 2010, underscored the need to grow other sectors, including agriculture processing, forestry, tourism, and high-tech services.
However, MBA Ognane is optimistic about the role of the oil industry in Gabon's economic future. He argues that they need to continue to provide the revenue needed for the transition to occur.
“For Gabon to diversify the economy well, they need their biggest contributors to the economy to be stable and perform, and others can take off.”
According to the IMF, the sector accounts for about a third of GDP, 40% of government revenue and more than two-thirds of export revenue.
