💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Another former OPEC member, Gabon, wants to rejoin oil group - sources

Published 15/04/2016, 08:42
© Reuters. OPEC logo is pictured at its headquarters in Vienna

By Rania El Gamal and Alex Lawler

DUBAI/LONDON (Reuters) - The African nation of Gabon wants to rejoin OPEC after more than two decades, two OPEC sources said, becoming 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.

"They sent the request to OPEC officially," said one of the sources, an OPEC delegate.

An oil official in Gabon declined to comment.

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, news reports said at the time.

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 which will be discussed this weekend in Doha. 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 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. 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.

© Reuters. OPEC logo is pictured at its headquarters in Vienna

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.

(Additional reportning by Joe Bavier; Editing by David Evans)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.