The Republic of Gabon issued its new Hydrocarbons Code on 16 July 2019 (law No.002/2019) regulating the sector of Hydrocarbons. A decree (No. 00112/PR) was issued on the same day promulgating the law. This new Code was indeed promulgated to incentivize not only foreign investments into the country with more attractive contractual terms but equally to make the upstream sector more accessible to Gabonese citizens. Article 70 defines a new model of production sharing contract called ‘Convention of Exploitation’ and Article 100 stipulates a preference in the attribution of marginal discoveries and fields as well as mature fields to the national operator and autochthonous companies. The new Code has several other features that ensure that the new small autochthonous companies will be treated fairly and transparently.

The new Hydrocarbons Code has defined the Convention of Exploitation, however there is currently no experience as no autochthonous company has yet succeeded in being awarded a permit under the new Code. Mandji Energy Company has carried out much work to evaluate and compare the Convention of Exploitation as compared to the traditional PSC (CEPP in French). There are indeed many terms and parameters to take into account and that can have a significant impact on the commercial feasibility of the marginal field. Economic simulations have been conducted to assess the two type of permit and the results are indeed intriguing. MEG believes that its deep understanding of the mechanics of the various types of the PSC gives it a competitive advantage, in particular thanks to its General Manager who is a top expert of the new Hydrocarbons Code.