The upstream oil industry is the mainstay of the Congolese economy supplying two-thirds of government revenue. Oil accounts for 70% of Congo’s GDP and the majority of the country’s exports. Current reserves are estimated to be 1,291 million tonnes of crude and large reserves of associated natural gas exist. Congo is one of the West African countries where Energy Africa is active. Average production for 1999 is estimated at 270,000 bpd. The
The downstream oil industry is also an important element in the country’s economy. The oil industry is predominantly run by foreign companies and is centred on the coastal city of Pointe Noire.
Congolaise de Raffinage, which operates the Pointe Noire refinery, and Hydrocarbures du Congo (Hydro-Congo), the state oil company, are among the first six companies listed for privatisation. Hydro-Congo is no longer responsible for upstream exploration activities. Since February 2000, exploration and production assets were transferred to the newly formed national company, Société Nationale des Pétroles du Congo (SNPC). SNPC is now the registered title holder in the exploration and production permits. Hydro-Congo however retains its distribution and marketing activities.
The companies understood to be interested in buying Hydro-Congo are Shell, Elf, Total and Addax. It is not known yet whether they have filed an application.
Crude oil is the mainstay of the Congolese economy supplying two-thirds of government revenue. Current reserves are estimated to be 1,291 million tonnes of crude. Large reserves of associated natural gas exist. Congo’s total oil production increased significantly due to the start up of the N’Kossa field in 1996 and Kitina in 1997. Wells operated by Elf account for roughly 73.4% and those operated by Agip 26.6% of production. Congo is one of the West African countries where Energy Africa is active.
Until recently, Hydro-Congo, was the state owned public company responsible for upstream exploration activities. In February 2000 all exploration and production assets were transferred to the newly formed national company Société Nationale des Pétroles du Congo (SNPC). SNPC is now the title holder for of all the exploration and production permits previously held by Hydro-Congo.
Elf Congo holds interest ranging from 35% to 65% in onshore and offshore exploration and production licenses in association with various international oil companies. In 1996, Elf’s production operations in the Congo produced 91,000 barrels of oil a day and accounted for approximately 12% of its total oil production compared to 14% in 1992. Elf has a terminal at Djeno, south of Pointe Noire and some production on offshore platforms. The company’s largest offshore production facility, the Nkossa oil field, is located in the Gulf of Guinea, 60 km off the Congolese coast.
Exploration takes place on a large scale and several new discoveries have been made. The strong influence of the French government has assisted Elf Congo to have a pre-eminent position, alongside Agip and Amoco, in exploration and production and refining.
In August 1998, Energy Africa entered into an agreement with International Finance Corporation (“IFC”) whereby it acquired the IFC’s 43.75% holding in their joint venture company, Energy Africa Haute Mer Holdings Limited, in exchange for 5 039 950 new shares in Energy Africa representing 5% of the enlarged share capital of the company. This brought Energy Africa’s net interest in the N’Kossa field and Haute Mer exploration permit from 2.25% to 4%. The IFC and a group of banks remain as lenders to the N’Kossa project.
The downstream oil industry is an important element in the country’s economy.
The Coraf refinery, situated at Pointe Noire, has a nominal operating capacity of 20,000 barrels per day (1 million tons of crude per annum) but generally operates at a rate of 56% or lower. Ownership of the refinery is split between Hydro-Congo (60%) and Elf (40%).
Distribution and marketing of petroleum products is carried out by Hydro-Congo.
A lubricant blend plant exists in Pointe Noire. Mobil and Shell supply additives to the plant while base oil is imported from France. There are five base oil tanks as well as blending and storage facilities.
The are approximately 100 service and filling stations in different parts of the country, 20 of which are situated in Point Noire itself. Most service stations are in need of repair and investment. The service stations are also retail outlets for bottled liquefied petroleum gas (LPG), petrol, illuminating kerosene and automotive diesel. Some of Brazzaville’s best service stations were partly or completely destroyed during fighting between July and October 1997.
The distribution infrastructure consists of river, road, rail and pipeline, all of which are in need of repair and maintenance. Product is delivered inland by rail. Should the railway connection not be available then product is shipped to the Democratic Republic of Congo, piped to Kinshasa and barged to Brazzaville. Product is also distributed from the refinery via truck. There are two small storage depots located in Brazzaville and Ojo. Depot facilities are in need of rehabilitation and repair.
The tax on petroleum products is about 29% and also represents roughly 29% of government indirect taxes.