What is Gabon’s new approach to local content?

By Mickaël Vogel, Director of Strategy

Amongst landmark regulatory developments that have marked the second half of this year in Africa is the adoption of Law N. 002/2019 of July 16th, 2019 on regulating the hydrocarbons sector in the Republic of Gabon.

During a visit in Libreville in September 2019, our Director of Strategy Mickaël Vogel had the opportunity to sit down with His Excellency Noël Mboumba, new Minister of Petroleum, Gas and Hydrocarbons and discuss with him and his team the key reforms brought by the new law.

The new Code aligns with the latest regulations and standards when it comes to regulating and supporting local content development. These include provisions to give priority to national workforce in available jobs, the hiring of foreign workforce only in exceptional circumstances and for jobs requiring critical skills, and the progressive replacement of foreign workforce by national workforce. Moral and physical entities operating in Gabon are also required to submit every year a training programme to the Ministry demonstrating their efforts in the development and training of Gabonese nationals. In addition, the State will be supporting all contractors procuring local services from Gabonese companies with an artificial augmentation of petroleum costs.

A key addition to the country’s new approach to local content development is the introduction of a new concept of indigenous company (“entreprise autochtone”). According to the new law, an indigenous company is defined as a Gabon-registered entity in which at least 60% of the capital is held by Gabonese nationals, which is managed by Gabonese nationals and where at least 80% of the workforce is made of Gabonese nationals. In order to ensure quick development of indigenous companies and their participation in the development of Gabon’s oil & gas sector, these will be given preferences, along with the Gabon Oil Company, in the exploitation of marginal discoveries and fields. By adopting such a measure, Gabon is following successful examples of local content development in jurisdictions like Nigeria, where marginal fields have proven to be a gold mine for several local operators and companies.