Gabon's Assala boosts crude output as state tightens grip on key sector

Gabon has continued to consolidate control over its lifeblood oil sector since acquiring Carlyle’s 50,000 b/d Assala assets in a contentious pre-emption deal eight months ago, in what experts say could become a new trend in mature African producers seeking energy security.

In June 2024, state-owned Gabon Oil Company bought the $1 billion projects from US private equity firm Carlyle, taking over London-based Assala, despite France’s Maurel & Prom having agreed to purchase them. Sources told S&P Global Commodity Insights that Swiss-based trader Gunvor had provided $800 million in financing for the transaction.

The move shocked many in the West African oil sector, where pre-emption rights are scarcely used. Insiders expressed concerns about whether the move would dent investor confidence and whether GOC – which operated a single 1,000 b/d oil project and lacks the deep pockets of an IOC – could maintain production at the key fields. Meanwhile, Glencore’s experience in Chad, where an oil price crash left the government unable to pay a large loan, gave analysts pause.

However, six months on, GOC has not only overseen a production increase at the Assala fields, but has also taken other assets into state hands. Interviews with people familiar with the matter, including Assala insiders on condition of anonymity, suggest such concerns were unfounded, despite some early teething issues.

“It looks like dramarama from the outside,” said an Assala source, “but it has been smooth. We have been drilling constantly. Production is at 55,000 b/d…we’re getting on with it.”

Energy sovereignty

Carlyle bought the Assala assets from Shell in 2017 for $587 million, and pumped millions of dollars into them, boosting output by a third. They include seven onshore producing licenses -- six of them operated -- as well as a pipeline network and the Gamba export terminal. Assala controls a significant share of Gabon's key Rabi export grade, which is medium-sweet and popular among refiners in Europe, Israel and Asia, according to S&P Global Commodities at Sea(opens in a new tab) data.

The pre-emption, a rare case of state involvement in the oil sector, followed a coup in the Central African country in August 2023, when military officer Brice Oligui Nguema unseated Ali Bongo, ending the Bongo family’s decades-long rule.

Nguema, who is standing in presidential election for the first time in 2025, sold the deal as a vital step towards energy sovereignty and security in the aftermath of Russia’s invasion of Ukraine, which roiled global energy markets.

Some sources close to the deal characterized it as an attempt to build popularity by whipping up patriotic fervor and anti-colonial sentiment. The Assala pre-emption left GOC, which had operated only the 1,000 b/d Mbouma field, to take over its first major assets and a company headquartered in London.

Simon Cudennec, a partner at law firm Bracewell, said the deal “shocked the industry” and reflected a trend of “state interventions” in Francophone West Africa.

While Gabon’s government was attempting to “reassert control over the country's natural resources and capture more value for the sector,” Cudennac said, “such decisions create uncertainties for international investors.”

Degree of frustration

Multiple sources said the acquisition faced teething issues at first, following the arrival of senior staff from the state oil firm. “There was a little degree of frustration from some” and a sense that the GOC executives were “not engaging with the detail”, said one source.

Prior communications had been limited between the parties, while a long and detailed Maurel & Prom transition process was abruptly cancelled.

Assala’s CEO, David Roux, left along with the rest of the management team as part of the deal, sources said.

Meanwhile several others resigned or took up roles elsewhere. Some were concerned about being on the hook for any potential accidents in Gabon, according to sources. The company’s crude traders, meanwhile, discovered their duties had been shifted to Gunvor. Sources said employee sentiment was influenced by the often-negative headlines around the pre-emption.

In all, between 15% and 25% of Assala’s 50-60 permanent staff left the company following the acquisition, although core staff, including on the geology side, stayed.

Since then, however, “things have settled down”, one source said, with GOC empowering legacy Assala staff to manage the company and its assets.

“We have a shareholder that has come in very open to understand what we do, how we do things,” said an inside source. “They’ve acknowledged the massive challenge they’ve taken in taking over Assala and how they are here to support us and make sure that together we achieve our goal, which is to increase production and therefore [guarantee] a higher economic return for the Gabonese state.”

Crucially, Assala has managed to maintain production at its assets and is in a position to continue that trend by reinvesting revenues, sources said.

“We maintain the trajectory of optimizing production from our existing assets,” one insider said, adding that Assala is in the process of mobilizing a fourth drilling rig. Production has risen from 48,000 b/d when GOC took over the assets to 52,000 b/d on average today with the gradual resolution of technical issues, the source said.

They added that Assala’s annual capex would exceed Carlyle’s, which was understood to be around $300 million, with a well drilled about every five weeks through 2026 and workovers planned to fight an estimated 15% natural decline. “We remain a little bit aggressive because it’s the only way to fight the production decline and bring forward the oil of tomorrow,” the insider said.

Natural production declines from the mature fields are inevitable, however. Since 2017, 32 wells have been drilled on the Rabi field, which is currently producing around 28,000 b/d. “We’re kind of running out of wells to drill,” said one Assala source. Nevertheless, undeveloped gas fields – an area of interest for GOC – could add barrels of oil equivalent.

Assala declined to comment. Representatives for GOC could not be reached for comment.

New assets

While natural declines at Assala’s projects pose a challenge for GOC in the longer term, the state firm has looked to snap up other fields.

Sources said GOC has taken over operatorship at the onshore Tsiengui and Obangue fields, which are currently producing 5,000 b/d, after Beijing-based Addax’s production sharing contract expired in 2024.

Verner Ayukegba, senior vice president at the African Energy Chamber, a lobbying group, said the Assala deal reflects a new operational style for African upstream players. “GOC understands that Assala is a strategic asset for the country. Post acquisition, they sought to retain the core technical team as well as boosting the team…to guarantee the integrity of the assets and maximize revenue to repay loans contracted to purchase the asset,” he said. “We are seeing the same with other assets taken over by African players.”

Cudennec added the Assala pre-emption might not be the last.

"The pre-emption by GOC was successful, and it could actually lead to a new trend in Gabon,” he said. “I think a lot of future transactions will contemplate the possibility of pre-emption – something that was absolutely not on the table for the last 15 or 20 years in Gabon.”