Gunvor provides $800 mil in financing for Gabon's Assala oil deal: sources

Gunvor provided the financing for Gabon's acquisition of Carlyle's 45,000 b/d oil assets in the country, the Swiss-based commodities trader confirmed to S&P Global Commodity Insights June 25.

State-owned Gabon Oil Company pulled off an audacious pre-emption deal for the over $1 billion Assala Energy projects, which closed June 21, despite sources close to the transaction expressing skepticism about its ability to fund the deal.

It came at the expense of Maurel & Prom's deal with Carlyle, a US private equity firm, for the projects first agreed in August 2023.

"This acquisition was done with the financial backing of Gunvor Group," the trading house said.

"Gunvor is proud to have been selected as Gabon's partner for this strategic acquisition," Stephane Degenne, a member of Gunvor Group's Executive Committee, said. "As a leading global oil trading company, Gunvor brings its strengths -- global market expertise and financing -- to support GOC's energy agenda."

The company did not provide any details, and would not comment on, the conditions for the loan.

However, sources familiar with the deal said Gunvor had provided $800 million in financing for the transaction, which was worth just over $1 billion in total -- $730 million base and the rest debt. The remainder will be covered in cash by the country, the sources said.

It is relatively common for trading houses to provide acquisition financing in return for marketing rights, but fluctuations in the oil price can impact the governments' ability to meet repayments.

Chad still owes Glencore hundreds of millions of dollars a decade after the Swiss trader helped finance its deal for Chevron's assets in the country.

Sources suggested Gunvor could also have secured a portion of Gabon's profit oil -- the state's share of production by companies in its oil sector -- but that could not be confirmed.

The assets include seven onshore production licenses -- six of them operated -- as well as a pipeline network and the Gamba export terminal, which is used by other oil companies to export crude. The development 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 data.

Alongside concerns over financing, GOC has no experience managing a major field, having operated only the 1,000 b/d Mbouma oilfield prior to the Assala deal. Carlyle bought the Assala assets from Shell in 2017 for $587 million and pumped millions of dollars into them, boosting oil output by a third.

According to Gunvor, Marcellin Simba Ngabi, GOC's CEO, said the "acquisition is of paramount importance for the Republic of Gabon, unique shareholder of Gabon Oil Company. It will enable the Republic of Gabon, reinforce its control and sovereignty over its oil and gas reserves and significantly increases its oil revenues."

The deal, which raised concerns around direct state involvement in the oil sector, followed a coup in Gabon in August, when Bruce Oligui Nguema unseated Ali Bongo, ending the Bongo family's decades long rule.

Writing on Twitter, now X, Mays Mouissi, Gabon's economy minister, said: "We did it! We have completed the acquisition of Assala Energy. Gabon will now operate alone, produce and market a significant part of its oil. Our country is now the second largest producer of oil extracted on its territory."