D.R. Congo tries to elbow way into Africa oil club

KINSHASA - Democratic Republic of Congo held its first national oil and gas congress this week, seeking to drum up interest and investment in its potentially lucrative but long ignored crude sector.

By (Reuters)

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Thu 14 Aug 2008, 6:29 PM

Last updated: Sun 5 Apr 2015, 11:53 AM

Despite its stretch of coast between African oil giant Angola and Republic of Congo, a smaller producer, Democratic Republic of Congo produces just 25,000 barrels of crude a day.

In over three decades it has pumped around 350 million barrels -- the equivalent of 11 days of Saudi production.

Foreign investment has poured into Congo's heavily touted mining sector since polls in 2006 meant to draw a line under decades of mismanagement and armed conflict, but oil has lagged.

Until last year, Congo didn't even have an oil ministry.

"We have three sedimentary basins, but we only know with a certain amount of precision the reserves on the coast. We have only incomplete data for the other two," Oil Minister Lambert Mende told Reuters.

The ministry estimates there are between 2 billion and 4 billion barrels of crude beneath its narrow strip of territorial waters in the Atlantic and onshore near the coast.

However promoters of the sector say the real potential lies elsewhere, from the massive, unexplored Cuvette Centrale Basin in the heart of the world's second largest tropical forest, to Lake Albert on the northeastern border with Uganda.

"The Cuvette Centrale is a continent, not a basin," Marcio Mello, president of HRT High Resolution Technology and Petroleum, told the conference on Tuesday.

The Brazilian firm is currently mapping 800,000 square km (309,000 sq. miles) of the basin to be spit into blocks in 2010.

"There is already strong data to say we have oil, but we still need more ... We need to know what's there," he said.

To the northeast lies the Lake Albert Basin, split down the middle between Congo and Uganda. Congo has not begun exploration on its side, but production is due to start on the Ugandan side next year, led by Ireland's Tullow Oil which believes it could be sitting on 2 billion barrels of reserves.

Risks, rewards

Oil companies have learned to negotiate the challenges of operating in Africa, dealing with armed militia in Nigeria and authoritarian governments in Equatorial Guinea and Angola.

Congo presents its own obstacles.

Kinshasa's chronic power outages, a constant reminder of Congo's crippled infrastructure, repeatedly delayed talks on the conference's second day. A closing ceremony on Wednesday was delayed because Oil Minister Mende was nine hours late.

Perhaps luckily for those keen on wooing foreign investors, few actually attended.

Investor confidence is fragile and high-level corruption remains rampant despite government pledges to stamp it out.

Companies may also worry about the legal weight of the contracts they sign. Congo is currently reviewing all its mining and logging contracts. Most will be renegotiated, while others are expected to be cancelled outright.

Complications pumping oil out of the isolated Cuvette Centrale may discourage companies from bidding on blocks there, while developing of Lake Albert's potential oil wealth will require increased cooperation between the governments of Congo and Uganda, who were on opposite sides in Congo's 1998-2003 war.

A British contractor was killed a year ago when gunmen attacked a Heritage Oil Corp boat working on the lake. Congo and Uganda have yet to reestablish full diplomatic ties.

Yet for all the hurdles, some experts warn against being overly pessimistic on Congo's oil sector, pointing to the example of another post-war nation turned success story.

"You must not look at things as they are. You must see what they will become. Not long ago, Angola wasn't a big producer either," Adnane Bouhouche, technical director of the African Petroleum Producers' Association, told Reuters.

More news from