Small OPEC Producer To Start New Oil Project Despite Pledge To Cut Output

By Tsvetana Paraskova - Apr 03, 2023

Gabon, a small African oil producer and OPEC member, is days away from first oil at a new offshore development despite joining the surprise new OPEC+ cut of over 1 million barrels per day (bpd) announced on Sunday.

Gabon, which pumps around 200,000 bpd, will see in the next few days first oil from the Hibiscus / Ruche Phase 1 development campaign in the Dussafu offshore license, the drilling contractors and the operator of the license said on Monday.

Norway-based BW Energy said it had completed the drilling and completion operations on DHIBM-3H, the first production well of the Hibiscus / Ruche Phase 1 development. BW Energy has now handed responsibility for the DHIBM-3H well over to the production team, which will finalize preparations for production start-up.

Oslo and London-listed Panoro Energy, holder of the license, said that the well “encountered good quality oil saturated reservoir sands in the regionally prolific Gamba formation and will now be put onstream in the coming days.”

News of a new development offshore Gabon comes hours after the African OPEC producer, alongside the biggest OPEC producers in the Middle East, announced a total of 1.16 million bpd of fresh production cuts. Saudi Arabia, OPEC’s de facto leader and top global crude exporter, will cut 500,000 bpd and said that the move was “a precautionary measure aimed at supporting the stability of the oil market.”

Apart from Saudi Arabia and Gabon, OPEC heavyweights Iraq, the United Arab Emirates (UAE), and Kuwait, plus OPEC’s Algeria, and non-OPEC Oman and Kazakhstan, announced the 1.16 million bpd cut beginning in May and lasting through the end of 2023.

Gabon has pledged to cut 8,000 bpd off its output.

Per OPEC’s secondary sources in the latest monthly report, Gabon produced 196,000 bpd of crude oil in February, versus a quota of 177,000 bpd before the cut announced on Sunday.

Gabon’s share of the cuts is small and cannot compensate for the massive underperformance from other African OPEC members such as Nigeria and Angola.

By Tsvetana Paraskova for Oilprice.com