Gabon has entered a $1 billion oil-backed prepayment agreement with global commodities trader Trafigura, in a deal that will provide upfront financing to support the country’s economic priorities.
Under the agreement, the company will make the prepayment in exchange for future crude oil deliveries from Gabon over a seven-year period. Trafigura will also act as the exclusive buyer of Gabon’s profit oil throughout the term of the deal.
The arrangement allows Gabon to unlock immediate funding while using future oil production as repayment. The government said it plans to direct the proceeds toward its development agenda.
Gabon remains one of Africa’s leading oil producers and exporters, playing an important role in supplying crude to international markets. Oil is the backbone of the country’s economy, contributing about 45% to 50% of gross domestic product and accounting for more than 80% of export earnings.
Trafigura’s Global Head of Structured Finance, Dave Gallagher, said the agreement builds on the company’s long-standing commercial relationship with Gabon. He added that the transaction reflects Trafigura’s ability to arrange large-scale financing solutions for resource-rich countries.
Gabon’s Minister of economy, Finance, Debt and state holdings, Thierry Minko, said the agreement is designed to help optimize the country’s oil resources, strengthen the central bank’s foreign exchange reserves, and improve treasury management. He also congratulated the financial, strategic, and legal advisers involved for completing the transaction quickly.
Trafigura received legal advice from Bracewell, with teams based in London and Paris supporting the deal. Gabon was advised by Mayer Brown, led by lawyers from Paris, Dubai, London, Singapore, and other offices.
Bracewell partner Oliver Irwin said the transaction gave the firm an opportunity to apply its experience in Francophone Africa’s upstream oil and gas sector to deliver results within a short timeline.
Mayer Brown partner Olivier Mélédo described the agreement as an important transaction and said the firm brought together experienced advisers across multiple offices to complete the deal on schedule.
The Gabon agreement follows another recent Trafigura transaction in Ghana, where the company signed a forward purchase deal with Heath Goldfields tied to future gold production from the Bogoso-Prestea mine.
source:.africanlawbusiness.com
African Energy Council