Country

Assessment

Article 1 of the 2021 proposal  defines the regulation’s scope by including all key elements of upstream and midstream operations, most notably oil and fossil gas upstream exploration and production, gas gathering and processing, transmission, distribution, underground storage, and LNG terminals.

Downstream operations are subject to Directive 2010/75/EU, 2010, which is under revision.

At the United Nations Climate Summit in Durban in December 2011, President Ali Bongo Ondimba announced the objective set for Gabon’s oil industry of reducing the volume of gas flared by 2015 by a minimum of 60 percent (compared with 2009 levels). This target was not captured in legislation, but a national gas flaring reduction plan was prepared. The plan required all oil companies operating in Gabon to submit individual plans detailing how they would reduce gas flaring at their facilities.

Article 16 of Law No. 002/2019  refers to an institutional structure composed of the Ministry of Petroleum, Gas, Hydrocarbons, and Mines (Ministère du Pétrole, du Gaz, des Hydrocarbures et des Mines [MPGHM]), a regulatory authority, a national operator, and advisory bodies:

  • Article 17 states that the ministry in charge of hydrocarbons (MPGHM) is the competent authority ensuring implementation of the government’s policy on the upstream and downstream oil and gas industry.
  • Article 18 states that the application of the regulations governing the upstream, midstream, and downstream oil and gas sectors is to be carried out by the ministry department in charge of hydrocarbons, currently the General Directorate of Hydrocarbons (Direction Generale des Hydrocarbures [DGH]).
  • Article 28 defines the responsibilities of an independent administrative authority in the oil and gas sector (responsibilities currently with DGH), which include the following:
    • guaranteeing free competition in the oil and gas sector, per the Central African Economic and Monetary Community (Communauté Économique et Monétaire de l’Afrique Centrale) code on anti-corruption
    • contributing to the development of technical specifications in the oil and gas sector and ensuring operators’ compliance with technical, quality, hygiene, health, and environmental specifications, as defined in the legislation
    • guaranteeing pricing transparency and nondiscriminatory third-party access to essential infrastructure.
  • Article 27 reiterates the right of the National Hydrocarbons Company (Société Nationale des Hydrocarbures) to participate in exploiting, marketing, and distributing hydrocarbons and their associated products. Founded in 2011, the National Hydrocarbons Company—also known as the Gabon Oil Company—reports to the President’s Office and is under the technical supervision of the MPGHM and the financial supervision of the Ministry of Economy. The new law no longer expressly refers to this company as the national operator. The Gabon Oil Company is defined only as an operator whose capital is held exclusively by the state. Its functions include the following:
    • holding the government’s interests in national hydrocarbon resources and shares in private companies
    • investing on behalf of the state (alone or in joint ventures with private companies) in upstream or downstream oil and gas projects
    • undertaking any activity in the oil and gas supply chain, with the same rights and obligations as any other operator
    • entering into agreements with the state, in the same way as private companies, to operate new gas-processing facilities and pipeline infrastructure, potentially in a joint venture with private operators.

Article 125 of Law No. 002/2019  prohibits the flaring and venting of gas in Gabon. No evidence of situations exempt from this general prohibition without government approval could be found in the sources consulted. However, at the request of the contractor, the environmental authority can authorize flaring and venting for a period.

According to Article 125 of Law No. 002/2019 , at the request of the contractor and on the advice of the MPGHM, flaring and venting may be authorized within a period determined by the Ministry of Environment. Upon notification, the applicable thresholds (subject to periodical revision) will be determined for each field.

Article 126 of Law No. 002/2019  requires operators to submit a gas flaring reduction plan for all their production fields for the joint approval of the MPGHM and the Ministry of Environment.

No evidence regarding economic evaluations could be found in the sources consulted.

Article 127 of Law No. 002/2019  requires operators to equip production facilities with flare measuring devices. Article 248 requires that the ministry responsible for hydrocarbons approve the choice, location, installation, modification, and addition of any equipment for measuring and metering oil and gas production. Article 127 requires operators to report the volumes of gas flared to the ministry responsible for hydrocarbons. Failure to declare any volume of gas flared subjects the operator to a fine, the amount of which will be set by regulation in the future. Article 119 states that contractors are required to transmit to the DGH all information relating to the gas balance in accordance with the procedures to be set by future regulation. Article 182 mandates that all hydrocarbon permit holders provide the DGH with a report on its activities and any administrative, technical, economic, and financial information related to its operational responsibility, quality, health, and the environment under the conditions and time required by the regulations. The model PSC states that any flared volumes must be reported to the DGH monthly.

Law No. 002/2019  sets a series of sanctions, including penalties for contractors that fail to submit required studies and reports for their upstream activities, gas-flaring violations, and noncompliance with regard to flaring-reduction plans or flaring thresholds. Article 265 doubles the penalties in the event of a repeated offense. Article 266 provides that future regulations will determine the methods for the payment of penalties.

Article 269 of section 2 imposes a penalty of CFAF 50 million–CFAF 2.5 billion (about US$89,000–US$4.5 million as of September 2021) on any contractor that violates the prohibition on routine gas flaring. The same penalty applies if the contractor does not execute the flaring reduction plan or comply with the flaring thresholds set by the regulation. Article 278 imposes a penalty of CFAF 10–CFAF 100 million (about US$18,000–US$180,000 as of September 2021) on any contractor that deters inspections by the DGH. Article 280 imposes a penalty of CFAF 1–CFAF 2.5 billion (about US$1.8 million–US$4.5 million as of September 2021) on any contractor that violates the provisions relating to measuring or metering oil and gas, including system calibration.

Article 263 of Law No. 002/2019  states that the applicable future legislation and hydrocarbon contracts will provide administrative sanctions. Article 265 provides for the withdrawal of authorizations and bans on oil and gas production for repeated offenses. This provision is not new: in January 2013, Gabon revoked the Obangué license of Addax Petroleum after the company allegedly failed to pay customs duties and comply with other laws.