Home > Business > Gabon Indicates Interest To Rejoin OPEC After Leaving Cartel In 1995

Gabon Indicates Interest To Rejoin OPEC After Leaving Cartel In 1995

Gabon has indicated its intention to rejoin the Organization of the Petroleum Exporting Countries (OPEC) after more than two decades, two OPEC sources said.

The sources said Gabon would be the second former member in a year to seek a return to the oil exporters’ group just as it is taking the first steps in years to prop up prices.

If it returned, Gabon would be the smallest producer in the Organization of the Petroleum Exporting Countries and bring its ranks to 14 countries following last year’s return of Indonesia, which had quit in 2008.

One of the sources, an OPEC delegate, said they sent the request to OPEC officially, though an oil official in Gabon declined to comment.

Newsherald learnt that Gabon joined OPEC in 1975 and left in 1995 over the exporter group’s refusal to grant its request for reduced annual contributions in line with the country’s small production.

READ ALSO:  ECOWAS Partners FG On Regional Automotive Policy

Newsherald also gathered that the move to rejoin comes as key OPEC members and outside producers such as Russia are attempting to support prices through a deal to freeze output. The initiative has helped oil prices to start recovering from a 12-year low reached in January.

OPEC in 2014 had abandoned its traditional role of cutting supply to support the market, accelerating a drop in prices which were falling due to oversupply and prompting critics to question its relevance.

Gabon produces 200,000 barrels of oil per day (bpd) according to the International Energy Agency, and its output is in decline. Last year, the government launched an offshore licensing round in a bid to boost exploration.

Ecuador, which pumps 530,000 bpd, is currently the smallest OPEC producer.

The next step, the sources said, would be for OPEC oil ministers to discuss Gabon’s request when they hold their next meeting in June.

OPEC rules state that a country needs to have “a substantial net export of crude” in order to become a full member. Still, the ministers waived this requirement with the decision to welcome back Indonesia, now a net oil importer.

READ ALSO:  Shiite/Army Clash: Buhari Explains FG’s Position

Whether Gabon’s return would be as straightforward is not clear. Indonesia was deemed by OPEC to have “suspended” its membership, while it calls Gabon’s departure a “termination” – implying a more formal severing of ties.