Congo Brazzaville: Congo Brazzaville Energy Profile
2015/02/27
Overview
The Republic of the Congo (French: République du Congo), also referred to as Congo-Brazzaville, is a country located in Central Africa. It is bordered by Gabon, Cameroon, the Central African Republic, the Democratic Republic of the Congo and the Angolan exclave of Cabinda. The region was dominated by Bantu-speaking tribes, who built trade links leading into the Congo River basin. Congo-Brazzaville was formerly part of the French colony of Equatorial Africa. Upon independence in 1960, the former colony of French Congo became the Republic of the Congo. The People's Republic of the Congo was a Marxist-Leninist single-party state from 1970 to 1991. Multiparty elections have been held since 1992, although a democratically elected government was ousted in the 1997 Republic of the Congo Civil War.
Congo (Brazzaville), also known as the Republic of the Congo, is a mature oil producer with declining output at most of its fields; however, new offshore production in 2008 has recently revived oil output. The oil sector greatly underpins Congo's domestic economy, as petroleum accounts for 80 percent of government revenue and 90 percent of total exports, according to the U.S. Department of State and the World Bank.
A vast majority of oil exploration activities and production in Congo comes from offshore fields, which many also contain associated gas. Although the country has sizable proven natural gas reserves, only small amounts are monetized due to the lack of gas infrastructure. Congo also may hold large oil sands deposits (unconventional petroleum deposits of bitumen also known as tar sands) and Eni, an Italian company, is currently leading exploration activities. Congo is the second country in Africa, after Madagascar, that may start to produce oil sands for commercial use before the end of this decade.
Although Congo produces considerable amounts of oil, it still imports most of the electricity it consumes, mainly from its neighboring country, the Democratic Republic of Congo. Congo also has extensive hydropower potential, but most of it remains untapped. Despite Congo's rich energy resources, the electrification rate is very low, especially in rural areas, which is mainly due to a lack of electricity infrastructure. The Congolese civil war (1997-1999) left much of the country's transmission and distribution infrastructure damaged, especially in southern Brazzaville and in the Pool, Bouenza, and Niari regions, which has not yet been restored. The government has been looking to restore and expand the distribution network in Brazzaville and Point-Noire, but until then, wood fuel will remain a dominant fuel, especially in rural areas.
Oil and gas sector organization
Regulation
The Ministry of Mines, Energy, and Water Resources manages the country's oil and gas resources, while exploration and production operations are governed by production sharing agreements (PSAs). Congo's national hydrocarbon company, Societe Nationale des Petroles du Congo (SNPC), manages Congolese government-owned shares in hydrocarbon operations. SNPC has an operating interest alongside international oil companies (IOCs) through PSAs, which also encompass tax breaks and a royalty system. Congo has several active companies, such as Perenco, Murphy Oil, Africa O&G, Prestoil, Chevron, and SOCO Internationals, but the companies that dominant the oil and gas sector are Total and Eni.
Major companies
Total, a French company, and Eni have both been operating in Congo since 1968. Total is the country's leading oil producer through its subsidiary, Total E&P Congo, and produced almost 40 percent of the country's total oil production (117,000 barrels per day (bbl/d)) in 2011. Most of Total's oil production comes from its deepwater Moho-Bilondo license and the Nkosso oil field. The company also produced 30 million cubic feet per day (MMcf/d) of natural gas in 2011, which came from associated gas at its oil fields.
Eni is the leading natural gas producer in Congo, which it uses for reinjection into oil wells or processes it to fuel power plants in populated areas, as a part of Eni's access to energy projects initiative. Eni's gas production in Congo has increased and reached its highest level of 119.1 Mcf/d in 2011. The company also produced nearly 30 percent of the country's total oil production (87,000 bbl/d) in 2011, although this was a 10,000 bbl/d decrease from the previous two years. Most of Eni's oil and gas production is from the M'Boundi field, which it hopes to expand in the future.
Oil
Congo's first deepwater field came online in 2008 and helped to reverse declining oil production.
As of the end of 2011, Congo has proven oil reserves of 1.6 billion barrels, according to Oil & Gas Journal (OGJ), the fifth-largest proven reserves in Sub-Saharan Africa. In the late 1970s, Congo emerged as a significant oil producer. Production continued to expand considerably during the 1990s, but at the turn of the century, as oil fields reached maturity, production declined in 2001. However, from 2008 to 2010 oil production has increased every year as a result of several new projects coming online, mainly Congo's first deepwater field Moho-Bilondo. In 2010, Congo produced 311,000 bbl/d of total oil supply, surpassing the country's previous peak of 292,000 bbl/d in 2000. However, in 2011, as most of Congo's oil fields continued to age, total output fell by about 4 percent to 298,000 bbl/d, of which almost 10,000 bbl/d was natural gas liquids (NGLs) and the remainder was crude oil and lease condensate.
Exploration and production
The large offshore Moho-Bilondo oil field, operated by Total, is the chief contributor to the increase in production since 2008. It came online in April 2008 and reached plateau output at 90,000 bbl/d in June 2010, according to Total. Total has the majority operating interest of 53.5 %, in addition to Chevron's 31.5 % and SNPC's 15 %. Moho-Bilondo is the country's initial deepwater project and marks the major successful expedition to tap into Congo's deepwater reserves. Additionally, three other oil fields, the Ikalou complex (6,700 bbl/d), Azurite (19,000 bbl/d), and Libondo (12,000 bbl/d), have come onstream since 2008, according to IHS World Insight and reports from Total.
Despite the addition of new fields over the completed few years, Congo's total oil production is projected to decline in the short term. Congo's hydrocarbon minister announced that the country's oil production decreased in 2011, and the president warned that output may decline again in 2012. According to EIA estimates, in general production declined consecutively over those two years, and EIA expects this trend to continue in 2013. The decline is attributed to maturing fields and a slowdown in field development, according to IHS World Insight. As a result, the government is keen to develop offshore fields to supplement declining production from mature fields and is expected to hold a deepwater licensing round someday.
In the long term, offshore deepwater prospects in Congo have the potential to boost production again. According to Total, two positive appraisal wells, Bilondo Marine 2 and 3, which are located in the southwest end of the deepwater Moho-Bilondo field, have additional increase potential and studies are underway to develop the reserves. Additionally, wells drilled in the northern end of the field, Moho Nord project, as well showed potential. Total recently estimated that it will require $10 billion to further develop Moho-Bilondo and expects new production to begin between 2015 and 2017. According to Business Monitor International (BMI), the managing director of Total E&P Congo announced that the two new projects may produce up to 120,000 bbl/d.
In early 2012, Congo and Angola agreed to jointly develop and share profits from the Lianzi field, a deepwater field located within the two country's maritime border in the Lower Congo Basin. Chevron is the field's operator (31.25 %), with interest held by Total (36.75 %), ENI (10 %), Sonangol (10 %), SNPC (the Republic of Congo National Oil Company — 7.5 %), and Galp Energia (4.5 %). According to Chevron, production from Lianzi is expected to start in 2015 and produce a maximum of 46,000 bbl/d.
Eni announced that it launched a small pilot feasibility oil sands project in Congo in 2012. Oil sands are unconventional petroleum deposits of bitumen. In 2008, Eni and the Congolese government signed a transaction to explore and develop the oil sands deposit located in Tchikatanga and Tchikatanga-Makola, two areas covering a total of 1,790 square kilometers in the south of Congo. According to preliminary studies, the area is estimated to contain between 500 million barrels and 2.5 billion barrels of oil sands and Eni has said it could potentially cost up to $7.5 billion to develop. According to a 2011 Eni field trip statement, the company expects oil sands production to start sometime next 2014.
Downstream
Congo has one refinery, the 21,000 bbl/d Congolaise de Raffinage (CORAF) plant in Point-Noire. EIA estimates that total refinery output of petroleum products in 2010 was 13,800 bbl/d. The refinery operates at nearly half capacity due to poor performance. The vast majority of the refinery's output is used to satisfy domestic request, and the remainder is exported. For a number of years, the Congolese government has proposed to privatize and expand CORAF, but it has not from presently on found a committed investor.
Exports
Congo exports nearly all of the crude oil it produces, and sends a small all to its refinery for domestic consumption. According to analysis of trade data from World Trade Atlas (GTA) and APEX Tanker Data (Lloyd's Maritime Intelligence Unit), Congo exported about 290,000 bbl/d of crude oil in 2011. China and the United States are the top destinations for Congolese oil and together receive almost 60 % of the country's total crude oil exports. Europe (23 %) is an extra top destination for Congo's crude, followed by Asia and Oceania (11 %) and Canada (6 %).
Natural gas
Congo holds the fifth-major proven reserves of natural gas in Sub-Saharan Africa at 3.2 trillion cubic feet (Tcf), according to OGJ. The country's gross natural gas production was 334 billion cubic feet (Bcf) in 2011, although only 15 % (51 Bcf) was marketed. A majority of the natural gas, 68 % (228 Bcf), was reinjected to boost oil production. The remaining 17 % (55 Bcf) was flared or vented. Due to the lack of gas infrastructure, only 41 Bcf of dry natural gas was domestically consumed.
New gas-fired power stations have increased electricity capacity in Point-Noire, one of Congo's most populous areas, since 2010. However, the country still relies on electricity imports to satisfy growing power request in urban hubs.
Eni is reconstructing a 220 kilovolts high-voltage line from Pointe-Noire to Brazzaville and connecting the gas-fueled power station, CEC, to the national electricity network. Construction of the CEC and CED, and the increase in electricity capacity, has led to higher electricity consumption in the densely populated Pointe-Noire area. According to Eni, annual average per capita electricity consumption in the Pointe-Noire area rose to 462 Kilowatthours (KWh) in 2010, additional than three times the national per-capita average of 137 KWh per year.
Congo's technically feasible hydropower potential is 3,932 MW, but only 4 % of this has been developed so far, according to the International Journal on Hydropower and Dams. Projects under consideration include a 150-MW hydroelectric plant in the Bas-Congo Province called Zongo II, a 600-MW plant on the River Tcha in Cameroon to serve both Congo and Cameroon, and a 1,200-MW power station at Sounda Gorge. Congo's ability to capitalize on its hydropower potential depends primarily on the development and restoration of the domestic distribution network.
Energy sources
Total installed electricity capacity (2010): 361 MW
Natural Gas: 50.4%
Hydroelectric: 49.6%
Reliance
Extend network
People Access to Electricity (2008): 34.9%
Rural: 16.4%
Urban: 51.3%
Capacity concerns
Electricity transmission links are non-existent in a lot of parts of the country, and fighting during the civil war destroyed much of the remaining infrastructure.
Renewable energy
Solar energy
The Programme National de Développement des Energies Nouvelles et Renouvelables (ENR), is currently exploring the use of photovoltaic/solar equipment in Djiri. Due to the heavily-forested nature of the country, the potential for power generation by solar photovoltaics is non-ideal, although a significant potential for solar thermal utilisation exists. Average insolation in the country ranges from 2.0-3.0 kWh/m2/day.
Energy efficiency
The Republic of the Congo has a lot of significant energy resources which are far from being completely exploited. Only 3.6% of the potential hydroelectric energy is currently being used as fossil fuels are still the majority utilised, although new hydroelectric capacity has redressed the balance to near-equality. There is a huge surplus of biomass/wood energy resources.
Ownership
Electricity market
The Société National d'Electricité, known as SNE, is the national owned organisation responsible for electricity generation and supply. The company reports to the Ministry of Mines, Energy and Hydrocarbons. In mid-2001 the government invited international tenders for the privatisation of the SNE. Prior to the 1997 civil war, the SNE was one of the government entities considered for privatisation. This is presently not likely to occur in the immediate next, due to the damage inflicted upon the SNE's infrastructure during the war.
Competition
The SNE is a national-owned, vertically-integrated company, with the monopoly on power generation, transmission, distribution and sale in the country. The SNPC is currently owned by the national, and is integrated in its upstream operations.
Energy framework
1994 saw the introduction of a hydrocarbon code, with stricter rules on the use of hydrocarbons, and a additional concentrated effort to benefit from water/ hydroelectric energy. Additional recently, an electricity regulation project is being explored.
Energy debates
Recent developments include the construction of the new 25 MW Djeno oil terminal power station in 2009, contributing to the generation of electricity from gas for over 80% of the country's requirements, while reducing gas flaring. The station, which will be owned by a new joint-stock company, 20% owned by Eni Congo and 80% by the Republic of Congo, will be fuelled by the natural gas associated with the M'Boundi oilfields, and later, by the offshore discoveries of Marine Permit XII.
Throughout the shared program with Eni, the Republic of Congo will maximise its own potential as a major energy producing country, and become a benchmark in Africa in the tar sands and biofuels field, as a further benefit to food farming development. Eni, in the four-year period from 2008-2011, will invest US$3 billion in Congo, generating an expected equity production of 150 million boe. Eni has developed its operations in the country thanks to close collaboration with the Congolese authorities. This close relationship has resulted in the new agreements signed on 19 May 2008.
New developments in the hydropower sector of the country include the up-rating of the Imboulou dam to 120 MW, and in the second phase of the project, the 300 MW Ponte-Noire gas-fired plant will be expanded to 450 MW, developed as a joint venture between the government and Eni, with the Italian firm holding a 20% stake in the project.
Energy studies
Congo wants to recover the gases released from oil activity to use in electricity production. They estimate that around 50% additional of this gas could be utilised. There is currently a study for such a project at Pointe Noire, although the cost of this project is estimated at US$200 million.
Role of government
The Ministry of Energy oversees all energy policy decisions in the country, with the Minister having final responsibility. The Ministry of Hydrocarbons is responsible for all operations relating to the combined hydrocarbon resources of the country, and oversees the activities of the national entity in the sector, the SNPC.
Government agencies
No dedicated agencies exist within the government to promote the sustainable use of energy, or renewable energy technologies. The Ministry of Sustainable Development of the Forest Economy and Environment is involved in the conservation and sustainable use of the country's biomass resource.
Energy procedure
Development of the US$925 million, 1-gigawatt (GW) Sounda Gorge hydroelectric project has been postponed. Sounda Gorge, at the confluence of the Niari and Kouilou Rivers, is located approximately 85 miles north of Pointe Noire. Before independence, the French built access roads, a cement-processing factory and a deviation tunnel at Sounda Gorge. Following independence, Electricité de France (EDF) unsuccessfully tried to complete the generating facilities.
In February 2005, Associated Press announced that a South African-led consortium were planning a Congo River project that will nearly double Africa's current electricity output without harming the environment. The project will generate about 40,000 MW of electricity, and will be activated in phases over a from presently on-to-be determined period of time. In the initial phase, Eskom, the South African electricity company, together with the power utilities of Angola, Botswana, Congo and Namibia, will rehabilitate and upgrade two dams along the Inga rapids on the Congo River within four to six years, and generate about 9,500 megawatts of electricity for 12 southern African nations. At least half of the project's electricity will be produced through a process that diverts river water through electricity-generating turbines before funnelling it back into the Congo river. The project, which is estimated to cost US$50 billion (€37.9 billion), will be funded in part by the respective governments under the New Partnership for African Development, a program adopted by the African Union for the economic development of Africa. Further development of the proposed Inga project is ongoing, with a new memorandum of considerate signed between South Africa and the DRC in 2011, in an effort to open the way to a formal treaty, and execution of the long-proposed project.
Energy regulator
No dedicated energy sector regulator exists in the country. The SNPC has the authority to regulate oil production and exploration activities.
Degree of independence
Regulatory framework
Regulatory roles
The 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 at the same time as production begins. The PSAs as well 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 due to the government and is sold by SNPC on behalf of the national. Primary foreign operators in Congo include Total (France), Agip (Italy), Perenco (UK), and Maurel and Prom (France).
Energy regulation role
As the controlling Ministry of the national power utility, the Ministry of Energy and Water Resources is thought to have in general jurisdiction on energy sector regulation, due to its role in the all matters relating to the energy sector of the country.
Regulatory barriers
- Congo Brazzaville News
-
- AFGHANISTAN: Higher earning Why a university degree is worth more in some countries than others
- BOTSWANA: Data can fuel Africa's economic growth
- BOTSWANA: Pan African University Council Convenes in Second Ordinary Session
- CONGO BRAZZAVILLE: Congolese parties petition government to withdraw from the ICC
- CHINA: Africans View China’s Presence on the Continent as Positive
- BOTSWANA: 3 Ways Digital Technology Can Transform Africa Into a Global Power
- Trending Articles
-
- KENYA: Fitch concerned about Kenya's public finances
- GHANA: Ghana’s Young Entrepreneurs Get a Boost to Their Businesses
- WORLD: Meeting the worlds infrastructure requires huge investments
- SAUDI ARABIA: City Cement’s Deputy CEO Majed Al-Osailan
- BAHRAIN: Bilateral Relations UK and Bahrain look to the future as they celebrate 200 years of history
- GHANA: African Union Commission Chairperson approves the deployment of 40 short-term observers to the 7 December 2016 presidential and parliamentary elections in the Republic of Ghana