Congo to see first oil in 2023 despite "unjust" Western criticism, delays

The Democratic Republic of Congo should see first oil from some of its 27 available crude blocks before the end of 2023, despite delays in issuing licenses and "unjust" efforts by Western countries to prevent drilling in environmentally sensitive regions, the country's hydrocarbons minister told S&P Global Commodity Insights May 11.

"On the western side we believe we will see first oil already by the end of this year," Didier Budimbu said, referring to three Coastal Basin blocks. "And for the rest, it's as we go on and sign the joint ventures."

Speaking on the side-lines of the country's bid round roadshow in London, Didier Budimbu said new upstream activity was necessary to develop the DRC's economy, build hospitals and roads and lift millions out of poverty, adding that wealthy countries should shoulder the economic burden of fighting climate change.

"Untapped reserves mean increasing poverty as well. We are able to respond to the needs of [our] population only once we are able to tap those untapped reserves," Budimbu said. "Recently we were in Houston, Texas and we were able to see oil rigs that were still operational, and so we were wondering why not start [decarbonisation efforts] over there and then come to us."

LENGTHY DELAYS

The DRC is seeking buyers for 27 oil blocks in its Atlantic Coastal Basin, Cuvette Centrale, Graben Basin and around Lake Tanganyika. Three gas blocks have already been snapped up by US and Canadian companies. The African country, one of the world's poorest, claims its 5 billion barrels of potential reserves could be worth as much as $1 trillion, while Russia's invasion of Ukraine has spurred calls for African countries to boost energy security. The bidding round was supposed to conclude in January, but was extended to April-October, after oil majors TotalEnergies and Eni said they were not interested. Budimbu said the delays were caused by interested companies requesting more time. The DRC currently produces just 25,000 b/d of crude from a smattering of Coastal Basin projects, with efforts to boost production long hindered by conflict and inadequate regulation despite the nation recently ratifying a new oil law.

ENVIRONMENTAL FIGHT

The bidding round has faced a backlash among environmental groups and Western governments, including the US, with blocks spanning parts of the Virunga National Park, home to rare mountain gorillas, and Cuvette Centrale, the world's largest tropical peatland.

Budimbu said the DRC has rigorously-enforced environmental standards. "The oil bocks are a small part of the protected areas, they overlap...There is new technology that means we are able to drill but not affect the wildlife and biodiversity," he said. "[Environmentalists] should rest assured that by law we cannot keep going if we do not have an environmental report done."

As long as they offered a "financial return", Budimbu added, the DRC would happily sell blocks to carbon credit firms seeking to prevent drilling, although no such company has made an approach.

The minister also accused Western governments of turning a blind eye to rebel activity in the DRC, which neighbouring Rwanda has widely been accused of sponsoring. "We do find the position of the Western countries unjust," Budimbu said. "Would you rather we not use our natural resources to benefit our population, but you would allow rebel groups to keep disrupting that area?" Various countries, including the US and France, have called out Rwanda for supporting so-called M23 rebels.

WIN-WIN SITUATION

Currently, the DRC's eastern blocks lack transportation routes, but the country is in discussions with Uganda about connecting its projects to the 1,445 km East African Crude Oil pipeline, which will carry 250,000 b/d of crude from Ugandan oil fields to the Tanzanian port of Tanga, as well as for potential joint production in border regions.

"Working with our neighbors in a joint natural resource exploration arrangement with East African countries as partner states will not only attract more investments but will also ward off such pressures associated with development," Ruth Nankabirwa, Uganda's energy minister told a conference in Uganda May 10. "We are currently in talks with DRC to partner in EACOP."

Although TotalEnergies has poured cold water on the idea, Budimbu said the DRC joining Eacop would be a "win-win situation" for all parties.