Gabon delays auction on BP spill concerns

Gabon has postponed a 27 October oil block auction in part due to rising drilling costs and environmental concerns after BP's massive spill in the Gulf of Mexico, the central African country's government said.

"Wisdom has prevailed since new factors and objectives have arisen," Mines Minister Julien Nkoghe Bekale said to Reuters, adding exploration costs and environmental concerns had changed since the Gulf of Mexico spill.

"This approach is consistent with our hopes to achieve the best standards for risk prevention and industrial safety, and compliance with environmental standards," he said.

He did not announce a new date for the auction of some 42 offshore blocks - production from which could eventually help Africa's seventh largest crude supplier combat steep declines from existing fields.

The auction had originally been set for 5 May, but was delayed to 27 October due to what Gabon said was greater than expected international interest.

The new delay comes after a BP platform searching for oil in the Gulf of Mexico toppled and sank in April, leading to the worst spill in US history.

Gabon produces roughly 250,000 barrels per day of crude oil and relies on energy for the bulk of its revenues.

A Gabonese energy official said earlier this year that in addition to royalties and production costs, Gabon would seek a 50 per cent share of production for fields producing up to 75,000 bpd, and higher shares for fields producing more than that.

Gabon's oil sector is one of the continent's most mature and already home to international companies including France's Total and Anglo-Dutch Shell.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

twn Are you sure that you want to switch to desktop version?