Gabon to ban gas flaring, unprocessed log exports

By Linel Kwatsi

LIBREVILLE (Reuters) - Oil firms operating in Gabon will be banned from flaring gas in 2010, the government said in a statement.

Exports of unprocessed timber will also be banned next year in an effort to increase employment by making logging companies mill and add value to wood locally, according to a statement issued after a cabinet meeting late on Thursday

The announcements are among the first by the team under newly-elected President Ali Ben Bongo, who became Gabon's president last month after polls were held to replace his father who died in June after more than 40 years in power.

Having overcome short-lived but violent protests against his win, one of Ben Bongo's biggest challenges is to diversify the economy away from oil production -- some 250,000 barrels per day last year -- as reserves start dwindling.

Gabon will "rationalize the management of gas reserves by banning the flaring of these gasses by oil companies in 2010," according to a government statement read on state television by spokesman Seraphin Moundounga late on Thursday.

The central African nation will instead "use new techniques to recover (the gas) through re-injection, which will boost production on the one had and help us respect our international commitments to sustainable development by reducing emissions."

Gabon will also introduce public-private partnerships in the gas sector, the statement added.

French oil major Total is one of the biggest investors in Gabon and maintained its production there despite being targeted during anti-French violence during the post-election protests.

Gabon is due to open a new oil licensing round for over 40 blocks from two of its deepwater basins in May next year. [ID:nL5383306]

Nearby Equatorial Guinea is vying to become a regional gas hub by collecting the gas from nations in the Gulf of Guinea region for processing and export as liquefied natural gas (LNG).

The Gabonese government statement also said that there would be a review of the forestry code, as well as a revamping of the state logging company SNBG, but investors' interests were not in danger.

Bongo has promised to govern on merit rather than continue a tradition of handing out jobs to keep various ethnic groups happy. Bongo won just under 42 percent of the poll, with his two main rivals scoring over 25 percent each but failing to garner enough support in their case against Bongo.

Analysts had largely predicted a short spate of anti-Bongo protests before a return to business as usual, pleasing investors holding Gabon's 2017 Eurobond.

(Writing by David Lewis, editing by William Hardy)