Shell Facing Conflict in Gabon
While continuing to deal with persistent problems in Nigeria, Royal Dutch Shell’s issues in West Africa have now extended to the country of Gabon. On January 12, workers across the country began what they termed was an unlimited strike in response to the pending prospect of the company selling its assets in the country.
The move follows a directive from last month that all current employees effectively be guaranteed that they wouldn’t lose their jobs under new ownership. In addition, no employees would be transferred away from their current positions.
Shell currently has operations in five different cities within the country: Gamba Rabi, Koula, Libreville, Port-Gentil and Toucan. In addition, Gamba Rabi serves as an exporter for not only Shell’s product, but other oil producers as well. In the latter case, that accounts for roughly 20,000 barrels per day, or over one-third the daily amount of the 55,000 barrels produced by the company itself.
The sale of the company interests in Gabon are part of a continuing strategy to reduce costs and take a more active role in the development of alternative energy. That became evident in early 2016, when they agreed to pay approximately $54 billion for liquefied natural gas (LNG) producer BG Group.
Experts believe that the Gabon assets could be worth as much as $700 million on the open market, with Shell currently supplying about 25 percent of the daily output. While that’s a very small portion of the sale price they paid for BG, cutbacks elsewhere and the yearly revenue from LNG projects will continue to reduce that debt.
The country of Gabon has been marked by increasing instability, in part because of the re-election of Ali Bongo, the country’s president. The controversies surrounding that vote sparked violence from outraged citizens.