Note: Information contained in this report is the best available as of March 2002 and is subject to change.
Following a five-month period of civil war, General Denis Sassou-Nguesso was inaugurated as president of Congo in October 1997. Fighting, primarily in the capital and southwestern Pool region, resumed the following year and continued until the government and rebels signed cease-fire agreements in November and December 1999. In August 2000, President Sassou-Nguesso announced plans to submit a draft constitution to the interim parliament in March 2001. General elections are scheduled to be held by June 2002, and a constitutional referendum is slated to be held in January 2003.
Congo's economy consists mainly of village agriculture, an urban informal sector (i.e., unregulated business, commerce, and service activities), and an industrial sector dominated by oil and oil-related services with few linkages to the rest of the economy. Since the 1980s, the oil industry has provided the major share of government revenues and exports, replacing timber production and exports as the principle growth sector. Oil accounts for over 50% of Congo's real gross domestic product (GDP), 60%-80% of the government budget and about 90% of Congo's export earnings. Oil exports grew sharply, from approximately $820 million in 1994 to around $2.5 billion in 2001.
In spite of this oil wealth, Congo has experienced budgetary shortfalls as a result of public sector expenditures, the 1998/1999 slump in world oil prices, and a resumption of armed conflict in December 1998. Mirroring the pattern of armed conflict in the country, Congo's GDP growth rate has fluctuated over the past several years, from a real decline of 3% in 1999 to 7.5% growth in 2000, following the cessation of internal hostilities (plus higher oil prices). For 2001, real GDP growth is estimated at 3.4%-3.6%, and real growth for 2002 is forecast at 4.4%. Inflation has been reduced in recent years to only about 3%. Overall, Congo's non-oil sector shrank by 20% from 1996 to 1999.
Congo's business and administrative infrastructure was badly damaged during the 1997 and 1998-1999 civil wars, increasing the petroleum sector's dominance of the economy (since oil production was not directly harmed by the fighting). Economic activity was further hampered by the fact that over 800,000 Congolese, nearly 30% of the population, fled their homes during the 1998-1999 conflict. The cost of gasoline in Brazzaville climbed to three times the official level due to disruption of the rail line linking the capital with the port city and economic capital, Pointe-Noire, but this situation now has been remedied. In July 1997, the World Bank suspended disbursements to Congo due to non-payment of debt service. An International Monetary Fund (IMF) post-conflict recovery plan, approved in July 1998, could not be implemented because of the renewed fighting. With a return to fragile peace, the IMF approved a 1-year, $14 million credit in November 2000 to aid post-conflict reconstruction. Another IMF loan package, this one focusing on poverty reduction and economic growth, is expected in early 2002.
In July 2001, Congo signed an agreement with the IMF on a "staff-monitored programme" (SMP) as part of post-conflict recovery plans. The aim of the SMP is to lead to a formal "poverty reduction and growth facility" (PRGF) IMF lending program for the country. In exchange, Congo is expected to increase its financial and fiscal transparency (including at the state oil company), to improve the management of its fiscal balance and external arrears (i.e., by reducing fraud in the customs area), and to reduce cost over-runs for civil service salaries. In general, priorities for Congo in the next few years include structural reform (in the banking sector, for instance) and macroeconomic stabilization. After a meeting with Congolese government officials on October 6, 2000, donors expressed their support for Congo's Interim Post Conflict Reconstruction and Rehabilitation Program, while noting the heavy burden imposed on Congo by its debt. In 1999, the total Congolese debt was approximately $5 billion, amounting to a total debt-to-GDP ratio of more than 200%.
Congo is sub-Saharan Africa's fourth largest oil producer (after Nigeria, Angola, and Gabon), with estimated proven reserves of 1.5 billion barrels. The majority of Congo's crude production is located offshore and is heavily reliant on foreign personnel and technology. TotalFinaElf, holds a dominant position in exploration, production, and refining. Italy's ENI-Agip (Agip) plays an important secondary role, particularly in exploration and production.
Congo's crude oil types are typically medium and sweet, with gravities in the 22°API to 33°API range. The country's main crude export blend is Djeno, which has a 27.6°API gravity and a 0.23% sulfur content. Recent production on the country's largest oil field -- N'Kossa, with 500 million barrels in recoverable reserves -- and the second largest -- Kitina, with 145 million barrels in reserves -- has yielded lighter, higher value crude types of 36.9°API and 38°API gravities, respectively.
In April 1998, the Congolese government established a new national petroleum company, the Société Nationale des Pétroles du Congo (SNPC). SNPC assumed all upstream functions of Hydro-Congo (the state-owned oil firm retained its downstream operations), when exploration and production assets were formally transferred to SNPC in February 2000. In February 2002, the World Bank approved a $5 million loan to help increase transparency and to conduct an audit at SNPC. On December 28, 2001, Congo's High Court sentenced (in abstentia) former President Lissouba and several of his top aides to hard labor for mismanagement of SNPC funds and other improprieties relating to oil contracts. Meanwhile, the leader of Congo's opposition Movement for Democracy and Development, Joachim Yhombi Opango, in January 2002 publicly denounced mismanagement of Congo's oil resources by the current Congolese government, and demanded creation of a watchdog organization.
In 1994, Congo enacted new hydrocarbon legislation offering production-sharing agreements (PSAs) to foreign oil companies. The PSAs were designed to replace joint venture arrangements in existence since 1968. Under the PSAs, foreign oil companies act as contractors for the national oil company, SNPC. The PSAs are intended to ensure a constant minimum flow of revenue to the Congolese government, commensurate with similar agreements between other regional oil exporting states and major oil companies. Congo's PSAs commit foreign partners to carry out exploration and development within a pre-determined time (usually three years for each phase). Contractors finance all investment costs, and recover their investments when production begins. In 1995, foreign companies were given the option of converting existing exploration and production joint venture contracts to PSAs. All major operators in Congo have signed PSAs for their respective field developments.
Congo started to produce oil in 1957 from the onshore Pointe Indienne field, reaching a peak output of about 2,500 barrels per day (bbl/d) in the mid-1960s. Over the past ten years (see graph), Congo's crude production has nearly doubled, from 144,000 bbl/d in 1988 to an average of 262,000 bbl/d in 2001. This was down slightly from production in 2000, largely due to delays in bringing online the Djambala and Foukanda fields. About one-third of this oil goes directly to the government and is sold by SNPC on the state's behalf.
TotalFinaElf operates the majority of Congo's crude oil producing fields, while Agip holds the second largest operating share. TotalFinaElf averaged about 163,000 bbl/d of crude oil production in Congo during 2001, about 60% of the country's total output. During 2001, TotalFinaElf's Congo production was down slightly (about 5.5%) compared to 2000, probably due to declining returns at certain fields. As a result, the company was foreced to return two offshore permits to the government. In October 2001, TotalFinaElf said that it would boost offshore oil exploration in Congo. Overall, Congo's oil production is expected to decline through 2004 before rebounding as new field production (at Libondo, Tchibeli, Litanzi, and Yanga-Sud, for instance) begins to come online and offset reduced output at more mature fields. Most current exploration in Congo now has moved to ultra-deepwater areas.
TotalFinaElf operates Congo's largest field, N'Kossa, located on the Haute Mer permit. Discovered in 1984, N'kossa (two fixed platforms in 623 feet of water) began producing in June 1996 at 5,000 bbl/d. Production at N'Kossa averaged about 70,000 bbl/d in 1999, less than the originally projected 100,000 bbl/d-110,000 bbl/d. TotalFinaElf's partners on the Haute Mer Permit are ChevronTexaco, SNPC, and Energy Africa (Engen). Congo's current government has accused TotalFinaElf of spending excessive amounts of money on N'Kossa, in part due to money given to former President Lissouba (see above).
Many of the smaller TotalFinaElf-operated fields are located on the old Pointe-Noire Grande Fonds (PNGF) concession. The PNGF fields that TotalFinaElf recently brought into production are Tchibouela, Sendji, Yanga, Tchendo, Emeraude and Likouala. TotalFinaElf brought the Tchibouela-Est field (three miles east of the Tchibouela hub) into partial production in August 1998 by employing a "hubs and clusters" development strategy designed to boost productivity without heavy capital outlays. Tchibouela-Est holds an estimated 40 million barrels of recoverable reserves. TotalFinaElf's partner in the PNGF fields is Agip (35% interest).
Agip is the operator of the Loango, Zatchi, and Kitina fields. TotalFinaElf is Agip's partner on both Loango and Zatchi, while ChevronTexaco and SNPC are the major shareholders with Agip on Katina. Agip began production on the offshore Kitina field (southern Marine VII license) in December 1997. Production began from a single well at a rate of 5,300 bbl/d, and now averages 60,000 bbl/d. Estimated recoverable reserves are 145 million barrels and 11 additional wells are planned.
Shell has a 10% stake in the Marine IX permit (after selling off most of its holdings there to Santa Fe and Anadarko) and also holds interests in Mer Profonde Nord and Mer Profonde Sud (TotalFinaElf operator). In February 2000, Marathon Oil Company (Marathon) acquired a 15% interest from TotalFinaElf in Mer Profonde Nord, building upon Marathon's existing presence elsewhere in the Gulf of Guinea. In February 2001, Anadarko acquired a 37.5% share (and operatorship) of Marine IX from Santa Fe Energy. In April 2000, Chevron acquired 15% interest in Mer Profonde Sud, located 50 miles offshore in depths of 3,300-6,600 feet. Both the Mer Profonde Sud and Congo's Haute Mer permit lie adjacent to Angola's deepwater Block 14 (ChevronTexaco operator) which contains a number of recent large discoveries, including the Kuito field, which began production on December 15, 1999. In September 2001, Congo's government approved a draft agreement with Angola on joint oil development along their maritime border, including the Block 14/Haute Mer overlap. In February 2002, the head of SNPC, Bruno Itou, expressed disappointment that exploratory wells drilled by ExxonMobil at Mer Profonde Nord had come up dry.
While most of Congo's crude oil exports are destined for Western Europe (mainly France) and the United States, Congo also has sought to increase its sales to Asian markets. Congo exported 38,000 bbl/d of crude to the United States during 2001, ranking Congo as the 18th largest foreign supplier of crude oil to the United States.
Field Development and Exploration
In May 2000, TotalFinaElf announced its first deep offshore discovery in its Mer Tres Profonde Sud (MTPS) permit. Tests indicated that the Andromede Marine-1 well has a flow rate of 7,000 bbl/d of crude oil. Agip and ExxonMobil each hold a 30% share in the MTPS permit. TotalFinaElf is in the process of developing several smaller fields on the PNGF permit. Production on the Kombi and Likalala fields, with an estimated output of 40,000 bbl/d, began in December 1999. Other fields scheduled for development on the PNGF permit include Libondo, Tchibeli, Litanzi and Yanga-Sud. TotalFinaElf expects to begin production on all its PNGF fields by 2004. Total reserves are estimated to be 180 million barrels, and the total development costs are estimated at $135 million.
TotalFinaElf and its partners are continuing development and exploration on the Haute Mer permit, the location of the N'Kossa field. The Moho field, also in the Haute Mer area, was discovered in 1995. Moho's development has been delayed for several years, but TotalFinaElf now appears ready to proceed. Moho has estimated reserves of 400 million barrels of oil. In early 1998, TotalFinaElf announced the Libonolo and Bilondo Marine 1 discoveries. Bilondo Marine 1, which tested at 8,520 bbl/d, was the first discovery in Congo to confirm potential commercial crude oil accumulations from Tertiary sands. In February 1998, the Moho Marine 3 appraisal well also found crude oil in Tertiary sands that tested at a cumulative rate of 6,800 bbl/d. Both Moho and Bilondo are expected to improve returns on N'Kossa field when they begin feeding into N'Kossa's existing export facilities.
In other recent developments, Canada's Heritage Oil (Heritage) announced in February 2001 that it had discovered oil at the Kouakouala-2 well. Currently, the Kouakouala oil field produces around 1,000 bbl/d of oil. Kouakouala is part of the 850,000-acre Kouilou Permit, which is being developed by Heritage, M&P of France, and Tacoma Resources. Production at Kouakouala is expected to reach 4,400 bbl/d in 2004, while other production in Kouilou also is expected to rise. In July 2001, Heritage announced that it had found oil at the M'Boundi exploratory well in eastern Congo. Heritage estimated that M'Boundi could contain 100 million barrels in oil reserves. Also in July 2001, Agip announced that it had brought the Foukanda offshore field, in which it owns a 65% stake, onstream, just three years after its discovery. The field reportedly is producing 12,000 bbl/d. In November 2001, Agip announced that it had struck oil at the deepwater Awa Marine-1 well on the Marine X permit. And in December 2001, South Africa's Sasol announced that it was soliciting bids on its 18% interest in Marine X.
Refining and Downstream
Congo's sole refinery, Congolaise de Raffinage (CORAF) was commissioned in 1974 and began operations two years later in Pointe Noire. The nameplate capacity of the refinery is 21,000 bbl/d, but the refinery often operates at 50%-55% of its capacity, with prolonged periods of inactivity. Fighting from 1997 through 1999 severely disrupted the supply of CORAF fuel to the national market and led to an increase in fuel imports from the Democratic Republic of Congo.
Critical repairs were made to the refinery in early 2000, allowing CORAF to
fully resume its activities in April 2000 for the first time in four years. In
September 2000, fuel from the refinery was again able to reach Brazzaville due
to the reopening of the Pointe Noire-Brazzaville rail line. The rail line had
been closed for two years because of repeated sabotage by rebels. In June 2000,
a South Africa-brokered financial arrangement was announced to pay for the
dredging of the port of Pointe Noire. The port, equipped to a depth of 43 feet (13 meters)
to enable large ships to dock, had silted up to a depth of only 23 feet (7 meters),
effectively blocking large carrier ships. The last thorough dredging was in
1987. The oil companies that use the port agreed to make direct payments to the
South African bank which financed the dredging.
In May 2001, a tentative agreement was reached to sell Congo's state oil distribution and marketing company, Hydro-Congo. Two companies -- Shell and TotalFinaElf -- are to purchase Hydro-Congo, which had held a monopoly in the sale and distribution of oil products in Congo for over 25 years. In August 2001, the Congolese government approved a draft bill allowing for Hydro-Congo's privatization. The process of privatizing Hydro-Congo's downstream operations has been underway since 1997.
Congo contains an estimated 3.2 trillion cubic feet of natural gas reserves, but produces none. After Nigeria and Cameroon, Congo holds the third largest gas resource base in sub-Saharan Africa. Although the majority of Congo's natural gas reserves are associated (found alonside oil deposits), the country contains some non-associated fields, including the offshore Banga Marine and Litchendjili Marine fields. All of Congo's natural gas output is currently vented or flared because of a lack of infrastructure, but the government plans to reduce this by utilizing the natural gas for electric power production over the next several years.
The potential for hydroelectric power generation in Congo is large (3,000 megawatts-MW), but it has been largely unexploited. Electricity consumption currently is low, as most people in rural areas rely on wood as their primary source of fuel. Moreover, electricity transmission links are non-existent in many parts of the country, and in recent years, civil war has periodically disrupted power supplies. Congo currently has an electrical generation capacity, primarily hydropower, of around 89 MW. The 74-MW Bouenza and the 15-MW Djoué hydroelectric plants have been the mainstays of Congo's power generating capability since 1980. Congo's electricity is produced by the parastatal utility Societe Nationale d'Electricite.
Congo is a net electricity importer, purchasing approximately one-fourth of its requirements from the Democratic Republic of Congo. Congo plans to reduce its reliance on electricity imports by expanding current facilities and constructing additional generation facilities. In 1996, the Djoué hydropower station on the outskirts of Brazzaville was refurbished by Rotek, a branch of the South African power company, Eskom.
In November 2001, Congo and two Chinese companies signed a $220 million contract to build a 120-MW hydroelectric power plant on the Congo River. When the plant is completed in 2006, it is expected to double Congo's power generating capacity.
Meanwhile, development of the $925-million, 1-gigawatt (GW) Sounda Gorge hydroelectric project has been postponed. Some analysts have anticipated that the Sounda Gorge project could transform the country into a significant regional exporter of electricity. The project called for the implementation of a three phase construction plan at the confluence of the Niari and Kouilou Rivers, located approximately 85 miles north of Pointe Noire. The first phase would have involved the installation of two turbines. These turbines would have a capacity of 10 MW and would be used to generate cash flow for subsequent phases. The second phase entailed the construction of a 130-foot high dam, which would boost the plant's generating capacity to 240 MW. A third phase was to increase the dam's height to over 300 feet and its generating capacity to 1 GW. The Canadian-based Magnesium Alloy Corporation (MAC) is studying the possibility of establishing a 180-MW hydroelectric facility on the Kouilou River. MAC states the facility would primarily supply power for its magnesium extraction project, but an approximate 50 MW of power would be available for sale to domestic and regional consumers.
Prior to the 1997 civil war, Congo's National utility, Société Nationale d'Electricité (SNE) was one of the several government entities considered for privatization. Subsequent damage inflicted upon SNE's infrastructure in the Brazzaville area during the civil war has decreased the likelihood of immediate privatization. The French firm, Electricité de France, had expressed interest in SNE, and has offered assistance in restoring services to Brazzaville.
Sources for this report include: Africa Energy and Mining; Africa News Service; Agence France Presse; BBC Worldwide Monitoring; CIA World Factbook 2000; CountryWatch.com; Economist Intelligence Unit ViewsWire; Energy Day; International Monetary Fund; Oil Daily; Panafrican News Agency; Petroleum Intelligence Weekly; U.S. Energy Information Administration; World Bank; World Markets Energy.
President: General Denis Sassou-Nguesso
Independence: August 15, 1960 (from France)
Population (2001E): 2.9 million
Location/Size: Central West Africa; borders the Atlantic Ocean, the Democratic Republic of the Congo (to the east and south), Gabon (to the west), Cameroon and the Central African Republic (to the north), and the Angolan enclave of Cabinda (to the south)/342,000 square kilometers (132,000 square miles), slightly smaller than Montana
Major Cities: Brazzaville (capital), Pointe Noire
Languages: French (official), Kikongo, Lingala and Monokutuba, plus other African languages also spoken
Ethnic Groups: Kongo (48%), Sangha (20%), Batéké (17%), M'Bochi (12%)
Religion: Christian (predominantly Roman Catholic) (50%), Traditional Beliefs (48%), Muslim (2%)
Defense (1998E): Army (8,000), Navy (800), Air Force (1,200), Paramilitary Forces (5,000)
Minister of Finance and the Budget: Mathias Dzon
Currency: Communauté Financière Africaine (CFA) franc
Market Exchange Rate (2/5/02): US$1 = 753.34 CFA
Gross Domestic Product (GDP) -- Purchasing Power Parity exchange rate (2000E): $3.1 billion
Real GDP Growth Rate (2001E): 3.4% (2002F): 4.4%
Inflation Rate (2001E): 3.0% (2002E): 3.0%
Merchandise Exports (2002F): $2.5 billion
Merchandise Imports (2002F): $0.8 billion
Major Export Products: Crude oil, timber, sugar, cocoa, coffee, diamonds
Major Import Products:Capital goods, foodstuffs, petroleum products, machinery, vehicles and spare parts
Major Trading Partners: United States, France, South Korea, China, Italy
Total External Debt (1999E): $5.0 billion
Reserves excluding gold (2001E): $55.5 million
Minister of Petroleum Affairs: Jean-Baptiste Taty-Loutard
Minister of Energy and Water Resources: Jean-Marie Tassoua
Proven Oil Reserves (1/1/02E): 1.5 billion barrels
Oil Production (2001E): 262,000 barrels per day (bbl/d), of which all is crude oil
Oil Consumption (2001E): 7,000 bbl/d
Net Oil Exports (2001E): 255,000 bbl/d
Refining Capacity (1/1/02E): 21,000 bbl/d
Natural Gas Reserves (1/1/02E): 3.2 trillion cubic feet (tcf)
Natural Gas Production/Consumption (2001): None
Coal Reserves: None
Coal Production/Consumption (2001): None
Electric Generation Capacity (1/1/99): 118 megawatts
Electricity Generation (1999E): 302 million kilowatthours (99% hydroelectricity)
Electricity Consumption (1999E): 407 million kilowatthours
Minister of Industry, Mines & Environment: Michel Mampouya
Minister of Energy & Water Resources: Jean-Marie Tassoua
Total Energy Consumption (1999E): 0.02 quadrillion Btu* (<0.1% of world total energy consumption)
Energy-Related Carbon Emissions (1999E): 0.9 million metric tons of carbon (<0.1% of world carbon emissions)
Per Capita Energy Consumption (1999E): 6.6 million Btu (vs U.S. value of 355.8 million Btu)
Per Capita Carbon Emissions (1999E): 0.34 metric tons of carbon (vs U.S. value of 5.5 metric tons of carbon)
Sectoral Share of Energy Consumption (1998E): Transportation (18.7%), Industrial (18.4%), Residential (62.9%), Commercial (0.0%)
Sectoral Share of Carbon Emissions (1998E): Transportation (76.1%), Residential (21.3%), Industrial (2.6%), Commercial (0.0%)
Fuel Share of Energy Consumption (1999E): Oil (76.7%), Natural Gas (23.3%), Coal (0.0%)
Fuel Share of Carbon Emissions (1999E): Natural Gas (71.6%), Oil (28.4%), Coal (0.0%)
Renewable Energy Consumption (1998E): 39 trillion Btu* (0% increase from 1997)
Number of People per Motor Vehicle (1998): 50 (vs U.S. value of 1.3)
Status in Climate Change Negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified October 14th, 1996). Not a signatory to the Kyoto Protocol.
Major Environmental Issues: Air pollution from vehicle emissions; water pollution from the dumping of raw sewage; tap water is not potable; deforestation.
Major International Environmental Agreements: A party to Conventions on Biodiversity, Climate Change, Endangered Species, Ozone Layer Protection, Tropical Timber 83, Tropical Timber 94. Has signed, but not ratified: Desertification and Law of the Sea.
* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar and wind electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data.
OIL AND GAS INDUSTRIES
Organization: State-owned Société Nationale des Pétroles du Congo (SNPC) oversees offshore and onshore oil exploration and production.
Major Producing Fields: N'Kossa, Kitina
Major Refineries (1/1/99 Capacity bbl/d): Congolaise de Raffinage (CORAF) - Pointe Noire (21,000 bbl/d)
Major Oil Terminals: Djeno
Major Foreign Oil Company Involvement: Agip-Congo, Anadarko, BP, Chevron, CMS-Nomeco, Elf-Congo, Energy Africa, ExxonMobil, Heritage Oil, Marathon, Naptha, Occidental, Royal Dutch Shell, Sasol, TotalFina Elf
Links to other U.S. government sites:
CIA World Factbook - Congo-Brazzaville
U.S. State Department's Consular Information Sheet - Congo-Brazzaville (May 12, 2000)
U.S. State Department's: Human Rights Report for Congo-Brazzaville (February 2000)
U.S. Department of Commerce -- Trade Information Center
U.S. Information Agency -- Africa
U.S. Agency for International Development in Africa
To contact the Embassy of the Republic of Congo:
Embassy of the Republic of Congo in the United States
The following links are provided solely as a service to our customers, and
therefore should not be construed as advocating or reflecting any position of
the Energy Information Administration (EIA) or the United States Government. In
addition, EIA does not guarantee the content or accuracy of any information
presented in linked sites.
MBendi Information for Africa
MBendi Country Profile on Congo
University of Pennsylvania Congo Page
Harvard University: Africa Links Page
African Development Bank: Congo Page
International Energy Agency: Congo
Congo Online (in French)
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File last modified: March 10, 2002
Charles EsserURL: http://www.eia.doe.gov/cabs/congo.html