Democratic Republic of Congo’s Upstream Segment Ripe for Growth and Investments
With oil and gas production in Africa declining due to diminishes in legacy projects in leading markets such as Nigeria, Angola, Algeria and Libya, emerging markets such as the Democratic Republic of Congo (DRC) could potentially help revive Africa’s hydrocarbons market. As the DRC government seeks to maximize the exploitation of its hydrocarbon resources to address energy poverty and economic growth issues while also expanding the monetization of these resources through improved trading with international markets, the central African country’s upstream sector is ripe with opportunities for regional and international oil and gas players and investors.
Behind the market readiness for expansion are favorable regulatory improvements and the country’s largely untapped and potentially rich hydrocarbon basins that have led to international firms TotalEnergies and Perenco, and DRC parastatal Cohydro launching exploration activities. With only 4.5% of the DRC’s 180 million barrels of proven crude oil reserves having been developed so far, the launch of a licensing round for exploration in 16 oil blocks in May 2022 will further open up the DRC’s upstream market and unlock the country’s estimated 5 billion barrels of crude oil and 30 billion cubic meters of methane and natural gas reserves for production. In addition, with only one company, Perenco, producing oil in the DRC – at approximately 23,000 barrels of oil equivalent per day in 2020 - more players are set to enter the market, kickstart production and place the DRC on course to achieve its daily production target of between 500,000 and one million barrels of crude oil per day.
With additional tax alleviation and exemptions set to be introduced by H.E. Didier Budimbu Ntubuanga, Minister of Hydrocarbons of the DRC, to attract investments to boost upstream activities, the market is well positioned to be a new destination for oil investment.
What’s more, the government of the DRC is looking at improving cooperation with regional counterparts and leading hydrocarbons producers including Equatorial Guinea, Angola, the Republic of Congo and South Sudan, with the aim of expanding energy exploration and production while creating a regional market and accelerating infrastructure growth.
An agreement between the DRC and the African Energy Chamber (AEC), the voice of the African energy industry, reached in Luanda during the 8th African Petroleum Congress and Exhibition will also help connect the country with both regional and international energy stakeholders and investors to learn best practices on how to boost the upstream segment while securing investment. The partnership will be critical for enhancing the market, enabling the exploitation of the DRC’s energy resources to make energy poverty history across the continent by 2030.
“The AEC is delighted with developments within the DRC’s hydrocarbons sector and the political will being shown by the government to accelerate the development of these resources to address local and regional energy woes. We are also happy to partner with DRC under various initiatives to help the country further modernize its regime and fiscal and tax policies to attract investments to kickstart its energy boom,” stated NJ Ayuk, the Executive Chairman of the AEC.
In the spirit of cooperation, H.E. Ntubuanga will attend and participate at the AEC’s annual energy event, African Energy Week, Africa’s leading investment platform for the oil and gas sector, which will be hosted from 18 – 21 October 2022, in Cape Town, where he will attend high-level meetings, panel discussions, and ministerial, investment and upstream forums to promote and discuss investment opportunities across the DRC’s upstream market. Under the theme, Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment, AEW 2022 provides the best platform for DRC energy stakeholders to engage with investors, financial institutions and private sector executives to discuss, negotiate and sign deals that will drive growth across the country’s upstream sector.
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