* Oil sector accounts for 45 percent of gross domestic
* Oil revenues declined as prices fell, companies cut jobs
* Opposition tapped into anger about economy
By Gerauds Wilfried Obangome and Edward McAllister
LIBREVILLE/DAKAR, March 28 Charles Lekabi lived
comfortably as a driver for an oil company in Gabon's industrial
town of Port Gentil until he was laid off three years ago.
"Today, I struggle to pay my rent," said Lekabi, who worked
for French oil company Total for seven years before he
was let go for economic reasons.
"Since I was laid off, I bought a car to do taxi rides. At
least with this car I can continue to feed my family."
A steep drop in oil prices in 2014 hit the oil industry
worldwide. In OPEC member Gabon, production is in
decline, the recovery is slow and may not come at all.
The oil sector has accounted for 80 percent of exports, 45
percent of gross domestic product, and 60 percent of budget
revenue on average in the past five years, according to World
With revenues declining and the population feeling the
squeeze, President Ali Bongo is facing the strongest opposition
in years and some social upheaval including a spate of strikes
by oil workers demanding better pay and new contracts.
"Depleting oil revenues are pushing Gabon's economy towards
the cliff edge," said Maja Bovcon, senior Africa analyst at
global risk firm Verisk Maplecroft.
"Gabon is confronted with an unlucky combination of
political and economic circumstances."
Bongo said that economic growth last year was expected to
have reached 3 percent, a slowdown from the average of 6 percent
since he first took office in 2009.
The budget was cut by over 5 percent in 2017 because of
declining oil production and prices. Income per capita rocketed
from $3,090 in 2000 to $10,410 in 2014 as oil prices shot
higher. But it fell in 2015 for the first time in 15 years, as
oil prices slid.
Companies including two of the largest producers Total and
Royal Dutch Shell have scaled back, costing thousands
of jobs. Exploration in deep water off the pristine Atlantic
coastline that was supposed to make up for falling onshore
output has yielded little.
The former French colony is also still reeling from a
disputed election last September that turned violent in the
beachside capital Libreville, harnessing anger among poor people
who say oil revenues never trickle below the moneyed elite.
Bongo was initially handed victory, but opposition leader
Jean Ping called the election a sham, declared himself president
and demanded a recount in the Haut-Ogooue province, a Bongo
stronghold where initial results showed the president won 95
percent of the votes on a 99.9 percent turnout.
The case went to the Constitutional Court, which ruled in
Bongo, whose family has ruled the country of nearly 2
million for 49 years, has said he will diversify the economy
beyond oil into mining, forestry and agriculture. He aims to
rein in spending and increase social programs, though it is
unclear how much progress has been made so far.
Bongo said last year Gabon was building a manufacturing
industry for wood products instead of only exporting the raw
commodity from its forests and was developing mining by
producing manganese. He also said the government was
distributing land to boost agriculture.
The International Monetary Fund said that progress had been
made to diversify the economy but recommended "decisive action"
to address short-term revenue problems, without elaborating.
In a statement in February the IMF said it had begun
discussions about a "possible financial arrangement" with Gabon.
Oil companies are also looking closely at their operations
in Gabon where production has dropped over 40 percent from a
1997 peak of 370,000 barrels per day (bpd), according to the
U.S. Energy Information Administration.
Last year, output reached just 230,000 bpd, according to
consultancy Wood Mackenzie, which expects output to drop to
220,000 bpd in 2017. Accelerated declines are forecast in 2018
Citing volatile oil prices, Total in February said it had
sold stakes in some of its mature Gabon assets to London-based
Perenco. Shell, which has operated in Gabon for over 50 years,
last week announced that it has sold its onshore assets in Gabon
to Carlyle Group for $587 million.
Drilling in offshore prospects, where the hope for new oil
is highest, has been at a standstill since August 2016,
according to Drillinginfo, which monitors rig activity in the
region. There were nine offshore rigs operating in 2014, four in
2015, one in 2016 and none today, its data shows.
"In Gabon, it is quiet and getting quieter," said Andrew
Hayman, an Africa specialist at Drillinginfo. "There has not
been the success that there has been in Congo to the south."
Total this month said it had started production from its
Moho Nord site off the coast of the Republic of Congo.
In Gabon, 3,000 oil workers have been laid off during the
downturn, the oil workers union ONEP told Reuters. It said the
oil sector and connected activities now account for between
8,000 and 11,000 jobs.
Oil worker strikes have flared up and interrupted
production this year, fueled by what ONEP described in a
statement this month as "flagrant violations of human dignity".
At one site run by Maurel et Prom Gabon SA
soldiers took over the site in February to ensure operations
Former oil workers see their options dwindling.
Estelle, 27, a former office worker for Perenco, was laid
off two years ago, for economic reasons. She is still
“Today, I have to start from zero,” she said.
($1 = 612.1700 CFA francs)
(Editing by Tim Cocks and Anna Willard)