Congo-Brazzaville Last Updated: May 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
![]() |
![]() | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
![]() |
Background | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Congo’s economy is driven by the hydrocarbon industry. |
The Republic of Congo (not to be mistaken with the Democratic
Republic of Congo) is a West African country that gained its independence
from France in 1960. For 43 years after independence, Congo experienced
intermittent civil war until a 2003 signing of a peace accord by Congolese
President Sassou, which brought relative political stability to the
country. Despite civil strive, Congo began developing its hydrocarbon
industry in the 1980s, which today, is the country’s primary source of
economic growth, accounting for 94 percent of total export earnings. The
timber industry makes up the majority of the remaining Congolese export
earnings. In 2005, Congo’s real gross domestic product (GDP) grew 8.5
percent and is expected to grow 4.6 percent in 2006.
![]() During 2002-2003, the Congolese government privatized various
parastatals including banks, telecommunication networks and transportation
monopolies to improve the country’s infrastructure and the investment
climate. In addition to an improved infrastructure, the International
Monetary Fund (IMF) noted in 2004 that the Congolese government had shown
greater fiscal responsibility in handling government revenues. The IMF
agreed to supply a Poverty Reduction and Growth Facility (PRGF) of $84.4
million to Congo as long as the country consistently made its arrears
payments to bilateral and multilateral creditors. In 2004, The World Bank
and the African Development Bank (ADB) also agreed to loan Congo $30
million and $51.1 million, respectively. In January 2006, Congo admitted
to hiding oil revenues from “vulture creditors” who had previously
purchased the country’s debt, which, in turn, has tainted Congo’s
transparency in oil revenue management.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
![]() |
Oil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Congo is the sixth largest oil producer in sub-Saharan Africa. |
According to 2006 estimates by the Oil and Gas Journal (OGJ), Congo has 1.5 billion barrels of
proven oil reserves. The majority of these reserves are located offshore;
however, one of the most recent oil discoveries in Congo (2004) is the
onshore M’Boundi field, with estimated proven reserves of 250 million
barrels. Congo was the sixth largest oil producer in 2005 in sub-Saharan
nigeria.html">Nigeria,
Angola,
Sudan,
Equatorial
Guinea and Gabon
in total oil production. Congo’s crude oil types are typically medium and
sweet, with API gravities ranging from 22° - 33°. The country’s main
export blend, Djeno, has an API gravity of 27.6° and a sulfur
content of 0.23 percent.
Sector OrganizationCongo's national oil company, the Société Nationale des Pétroles du
Congo (SNPC), regulates all oil production and exploration activities in
the country. SNPC develops production sharing agreements (PSAs) with each
foreign company that operates in Congo to ensure a constant minimum flow
of revenue to the government. Under the PSA contracts, foreign companies
carry out exploration and development during an agreed upon period of
time, while financing all investment costs which are recovered when
production begins. The PSAs also offer tax breaks and a royalty system to
operating companies. Because all major operators in Congo have signed PSAs
for their respective field developments, approximately one-third of the
oil produced goes directly to the government and is sold by SNPC on behalf
of the state. Primary foreign operators in Congo include Total (France),
Agip (Italy), Perenco (UK) and Maurel and Prom (France).
In March 2005, the Congolese government announced the signing of two
offshore exploration and production agreements with Sinopec (China) for
the Marine XII and High Sea C blocks. In August 2005, Soco International
(75 percent) signed a PSA with SNPC (15 percent) and Africa Oil and Gas
Holdings (10 percent) for the offshore Marine XI Block. The block is
located in the Lower Congo basin.
ProductionOil production in Congo peaked during 2000 at 280,000 barrels per day
(bbl/d). Since that time, oil production has steadily declined to the 2005
average of 227,000 bbl/d. The declining production is largely due to
maturing fields and delays in bringing new fields online. However, during
the first quarter of 2006, Congo’s oil production averaged 245,000 bbl/d,
which is expected to further increase as new fields (including the
Libondo, Tchibeli, Litanzi, and Yanga-Sud fields) come online. In 2005,
Congo’s oil consumption averaged 5,000 bbl/d, which is supplied by Congo’s
small refinery. Total is the leading oil producer in Congo, accounting for
approximately 40 percent of oil production, while Agip, as Congo’s second
largest oil producer, accounts for approximately 25 percent of oil
production.
![]() Congolese oil is exported through the country’s main port,
Pointe-Noire, which has little spare capacity and is in need of expansion.
Most of Congo's crude oil exports are destined for Western Europe (mainly
France) and the United States. In 2005, crude exports to the US averaged
31,000 bbl/d; however, this was a decrease from the 2000 average of 52,000
bbl/d. Congo has also sought to increase its crude exports to Asian
markets. In 2001, the Congolese government agreed to supply Djeno blend
crude to China.
Field Development and
ExplorationTotal, as the leading oil producer and foreign investor in Congo,
plans to double its current production of approximately 91,000 bbl/d, once
the Moho and Bilondo oilfields come online in 2008. In 2005, Total
received government approval to begin developing the two fields, which
will include the construction of 12 subsea wells. Once the fields come
online, their estimated production output is a combined 90,000 bbl/d. The
fields are located in the Haute Mer permit area and contain probable
reserves of 400 million barrels. Oil from the fields will be piped to the
Djeno terminal via the Likouala platform. Total operates the project with
a 53.5 percent interest and is joined with partners Chevron (31.5 percent)
and SNPC (15 percent). Total also plans to develop two N'Kossa satellite
fields: N'Kossa Sud and N'Soko. To date, Total has drilled four subsea
wells in the N'Kossa Sud field, which is located south of the main N'Kossa
field.
The M'Boundi field is considered by Maurel and Prom Corporation
(France) to be one of West Africa’s biggest onshore oil fields, with
estimated proven and probable reserves of 1.3 billion barrels. In 2005,
total field production averaged 57,000 bbl/d. Burren Energy (UK) drilled
an additional three wells in the M'Boundi field in 2005, which tested at
4,500 bbl/d, 1,600 bbl/d and 3,500 bbl/d respectively. Maurel and Prom (57
percent interest) is operator of the field and is joined with partners
Burren Energy (35 percent) and SNPC (8 percent).
In 2005, Heritage Oil (Canada) announced that its first commercial
well in the Kouakouala field, Well KKL 401, tested at an initial flow rate
of 1,600 bbl/d. Plans include connecting the well to the field's existing
production facilities, and the 12,000-bbl/d export pipeline from the field
to the Djeno Export Terminal. Kouakouala, which began production in May
2000, has an average output of 1,500 bbl/d at the four wells currently in
operation. However, output on the field is expected to increase following
the completion of a water injection program.
Also in 2005, Murphy Oil (U.S.) discovered oil in the Azurite Marine
No. 1 well in the Block Mer Tres Profonde Sud (MTPS). Murphy drilled two
additional wells on the block, which both proved unsuccessful. Murphy, as
operator of the block with an 85 percent interest and partner SNPC (15
percent), has plans to explore the block more extensively in the future.
Common Interest ZoneIn March 2003, Angola and the Republic of the Congo created the Zone
d'Interet Commun (ZIC, Common Interest Zone). The ZIC joint development
area, based in Brazzaville, includes portions of Block 14 (Angola),
operated by Chevron and the Haute Mer Block (Congo), operated by Total.
Congo and Angola share revenues equally from all oil production and
exportion occurring in the ZIC. In December 2004, Chevron announced a
"significant discovery" in the joint development zone, with the Lianzi-1
exploration well encountering two oil bearing reservoirs, one flowing at a
rate of more than 5,000 bbl/d. Chevron is in the process of appraising the
Lianzi-1 well’s commercial potential.
Refining and DownstreamAlthough the nameplate capacity of Congo's sole refinery, Congolaise
de Raffinage (CORAF), is 21,000 bbl/d, it often operates at less than half
capacity, with prolonged periods of inactivity. Despite the Congolese
government’s intention to privatize the refinery, investors have shown
little interest in the facility. The government has since been working to
expand and modernize the refinery in an effort to make it more attractive
to investors.
For over 25 years, state-owned Hydro-Congo held a monopoly over the
sale and distribution of oil products in Congo until it was purchased in
2001 by Total and Shell. In 2002, Chevron bought out Shell and with
partners Total, Tacoma/Puma-Energy (UK) and the Congolese government the
consortium formed a new company, Société Commune de Logistique Petroliere
(SCLOG) to transport oil products throughout the country. Currently, the
roads, railways and pipelines that comprise Congo’s distribution
infrastructure is in need of repair. Approximately 100 service and filling
stations are located throughout the country, and they provide bottled
liquefied petroleum gas (LPG), petrol, illuminating kerosene and
automotive diesel. The majority of service stations are also in need of
repair and investment.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
![]() |
Natural Gas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Congo contains the fourth largest proven natural gas reserves in sub-Saharan Africa. |
As estimated by the OGJ,
Congo contained 3.2 trillion cubic feet (Tcf) of proven natural gas
reserves as of January 2006. These reserve deposits constitute the fourth
largest found in sub-Saharan Africa behind Nigeria,
Mozambique
and Cameroon.The majority of Congo's natural gas reserves
are associated (found alongside oil deposits). However, the country
contains some non-associated fields, including the offshore Banga Marine
and Litchendjili Marine fields. Currently, most of the natural gas output
in Congo is vented or flared due to a lack of infrastructure; the
government plans to reduce the vented and flared natural gas by utilizing
it for electric power production in the future.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
![]() |
Electricity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Congo has huge hydroelectric capacity potential. However, the country currently imports electricity from the Democratic Republic of Congo (DRC) to satisfy consumption demand. |
In 2003, Congo had total electric generation capacity of 120
megawatts (MW), which primarily came from hydropower (92 MW). Congo is
estimated to have hydroelectric capacity potential up to 30 times (3,000
MW) the current capacity if it can be developed. The mainstays of Congo’s
generating capabilities are the 74-MW capacity Bouenza (Moukoukoulou) and
the 15-MW capacity Djoué hydroelectric plants. However, since the early
1980s, Moukoukoulou's actual productive capacity has been closer to 55 MW
due to attacks occurring during the Congolese civil war in 1997-1999.
State-run, Societe Nationale d'Electricite (SNE), estimates the cost of
necessary repairs to the generating facilities at more than $20 million.
In 2003, Congo generated 0.34 billion kilowatthours (Bkwh) of
electricity, while total electricity consumption for that year was 0.62
Bkwh. The electricity generation deficiency forced the country to import
electricity from the DRC. Even so, most Congolese in rural areas still
rely on wood as their primary source of fuel as electricity transmission
links are non-existent in many parts of the country. If funding can be
attained, the Congolese government plans to reduce its reliance on
electricity imports in the future by expanding current facilities and
constructing additional generation facilities.
![]() In 2002, Agip and Chevron completed a 25-megawatt (MW) natural
gas-fired power plant in Djeno. The power plant is fueled by associated
natural gas from the Kitina, Djambala and Foukanda offshore fields, which
is separated onshore at the Djeno oil terminal and piped to the nearby
power plant. The plant cost $32 million to build.
In 2003, Chinese companies, CMEC and CIEMCO, began constructing the
120-MW Imboulou hydroelectric dam. The dam is located on the Lefini River
and is expected to be completed in 2009. The Congolese government paid $42
million of the $280 million project cost, with the remainder being paid
through a low-interest loan.
In 2005, Anglo Belgian Corporation (Belgium) began constructing a
32.5-MW thermal power plant in Brazzaville. Anglo Belgian Corporation will
complete the plant late in 2006, which will provide partial relief for
Congolese, who are plagued with electricity shortages in the capital city.
The Belgian government helped finance the project with a $12.8 million
loan.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profile | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Links | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Information African Union AllAfrica.com - Congo Congo Online (in French) MBendi Country Profile on Congo NEPAD Associations and Institutions African Development Bank: Congo Page Harvard University: Africa Links Page International Monetary Fund (IMF) - Congo University of Pennsylvania Congo Page World Bank - Congo Foreign Government Agencies Embassy of the Republic of Congo in the United States International Energy Agency: Congo | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sources | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Africa Energy and Mining Africa News Service African Energy AllAfrica.com Agence France Presse BBC Worldwide Monitoring CIA World Factbook CountryWatch.com Economist Intelligence Unit ViewsWire Energy Day Factiva Global Insight International Monetary Fund Oil Daily Panafrican News Agency Petroleum Intelligence Weekly Reuters U.S. Energy Information Administration World Bank World Markets Energy World Markets Research Centre Xinhua | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||