Global commodities trader Trafigura has announced the signing of a $1 billion payment agreement under which it will become the exclusive offtaker of Gabon’s profit oil.
Under the agreement inked on 15 April in Geneva, Trafigura will pay Gabon in exchange for the future delivery of its oil over 7 years, according to a Trafigura news release.
The prepayment will advance the West African country’s development program while Trafigura exports crude from a diversified pool of producing assets and a range of operators.
Trafigura has a long-standing trading relationship with the OPEC member, whose oil exports account for about 45% of the country’s gross domestic product, handling not only the export of crude oil but also the supply and export of refined products.
Gabon has been producing around 200,000 B/D in recent years and is considered a small exporter, but, because oil accounts for 80% of the country’s exports, crude sales can make or break the national economy, according to the US Energy Information Administration.
Structured Financing and Logistics
Trafigura provides structured financing and logistics solutions to sovereign and corporate counterparties across emerging and developed markets to support long-term economic development goals.
The company is syndicating a portion of this exposure among international financial institutions, according to Trafigura.
“We are pleased to have signed this agreement with the Republic of Gabon, continuing our long-standing trading relationship and contributing to the country’s development agenda,” said Dave Gallagher, Trafigura’s global head of structured finance.
“This milestone prepayment underscores Trafigura’s commitment to long-term collaboration with resource-rich nations and our ability to structure innovative, large-scale financing solutions,” he added.
Thierry Minko, minister of economy, finance, debt, and state holdings for the Republic of Gabon, with responsibility for issues related to the cost of living, said, “The republic welcomes the strong return of Trafigura to Gabon and thanks the company for this agreement, which aims to optimize the country’s oil resources, strengthen the foreign exchange reserves of the Central Bank, and facilitate the proactive management of the nation’s treasury.
“The state extends its warm congratulations to the strategic, financial, and legal advisors, namely Algest, Rothschild & Co., Mayer Brown, Adna, and Bracewell LLP, for the remarkable work accomplished in record time,” he added.