Shell’s Gabon return sparks debate on offshore oil deals

Last week marked a significant moment for Gabon’s oil sector as Shell and the Ministry of Petroleum signed a memorandum of understanding. Industry observers see this as a positive sign for the country’s offshore petroleum attractiveness, particularly following the prior interest shown by ExxonMobil and BP in deep-water zones. Yet, a closer look reveals that the optimism may be premature.

The agreement is merely a statement of intent—far from a binding commitment. Before any oil can be extracted and sold, a lengthy process awaits. Shell retains the flexibility to withdraw if exploration yields poor results, global oil prices decline, or a more lucrative opportunity arises elsewhere. This isn’t the first time Gabon and the British energy giant have collaborated. Shell operated in the country until 2017, fully exiting by 2019. Its return aligns with its own strategic priorities, not an act of goodwill toward Gabon.

Here lies Gabon’s leverage: the government must negotiate shrewdly to secure favorable terms. Key questions loom: What percentage of revenue will the state retain? How many local jobs and training programs will be created? And once funds flow in, how will they be managed to ensure sustainable development rather than immediate expenditure? It’s important to note that commercial production could take seven to fifteen years. Even then, fiscal and employment benefits may not materialize until 2033 or later. Between seismic surveys, appraisal drilling, supply chain reactivation, and youth employment initiatives, the road ahead is complex.

Gabon isn’t alone in facing this challenge. Neighboring countries like Angola and Nigeria have refined their negotiation strategies to maximize oil sector benefits. Cost recovery thresholds, profit-sharing formulas, transparency measures, and strict oversight have been central to their approach. The real question isn’t how to attract Shell—it’s what conditions Gabon can impose to avoid repeating the mistakes of the past three decades. Shell is familiar with this dynamic; it signs similar MoUs globally, with outcomes hinging on the host country’s follow-through.