Tullow Oil shares slump as Gabon army officers declare coup

People in Gabon's capital, Libreville, rejoice following the announcement by a faction of Gabonese military officers stating their intention to overthrow the existing government.

Tullow Oil, the oil exploration company originally established in Ireland, experienced a significant drop in its stock value on Wednesday, reaching as high as a 12.8 percent decline. This decline was triggered by a military intervention led by officers in Gabon, a nation situated on the western coast of central Africa. Tullow Oil holds stakes in various onshore and offshore fields within this country, hence the impact on its share prices.

Nevertheless, a representative from Tullow stated that the political events currently taking place have not impacted the company's activities in Gabon, and they are carrying on with their production without any disruptions.

"Tullow will stay vigilant regarding the situation and collaborate with the field operators as required," she mentioned.

Gabon holds the title of being the largest non-operated contributor to Tullow's oil production. The oil and gas fields are operated by different partners, such as the Anglo-French company Perenco and Maurel & Prom, a company listed on the Paris stock exchange.

Tullow's share of production from predominantly offshore assets reached an average of 14,000 barrels of oil equivalent per day in the previous year. According to the company's most recent annual report, Gabon contributed £477 million (€555.4 million) to Tullow's total revenue of £2.01 billion in 2022, which resulted from the sales of crude oil.

Earlier this year, Tullow entered into an agreement with Perenco to exchange assets, aiming to improve its ownership stake in important fields in Gabon. Just a short while ago, Tullow gained approval from the Gabonese government to prolong various licenses in the country until 2046.

The armed forces in Gabon, a country known for its oil production, declared on Wednesday that they had taken control of the government. They promptly placed President Ali Bongo Ondimba under restricted confinement after the nation's electoral commission declared him victorious in his bid for a third term.

The military officials, who claimed to represent the military, announced on TV that the election outcomes were invalidated, the borders were shut, and governmental bodies were dissolved. This happened following a heated vote that aimed to prolong the Bongo family's rule of over fifty years.

A multitude of individuals flooded the roads of Libreville, the capital of Gabon, to express their joy over the military's involvement. In contrast, France, the previous colonial power of Gabon and currently having troops stationed in the country, condemned the overthrow.

Tullow's stocks finished trading in London with a decrease of 6.6 percent, resulting in the company's market worth reaching £495.6 million.

– Further investigation, Reuters

Joe Brennan writes about the markets for The Irish Times.

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