INTERVIEW: 'Gas is the future' for Republic of Congo as it battles stalling oil production

The Republic of Congo has set its sights on growing gas production to jump-start its hydrocarbons output, with declining crude oil production triggering a scramble to diversify into new markets.

Sub-Saharan Africa's third-largest oil producer has seen a decline in output from its oilfields, falling from a 2019 peak of 350,000 b/d to recent levels of some 260,000 b/d, according to the Platts OPEC survey from S&P Global Commodity Insights. At the beginning of 2024, Congo joined other African producers in accepting reduced production quotas from the OPEC alliance, conceding that it had consistently failed to reach its 310,000 b/d target.

As the single largest contributor to the Congolese economy and a source of 60% of its government revenues, according to IMF figures, politicians have banked on revived crude production over recent years.

Last year, Congo's minister of hydrocarbons Bruno Jean-Richard Itoua said the country planned to double its oil and gas production to 500,000 barrels of oil equivalent per day by 2025, but after crude volumes failed to budge, the target has been downgraded to 350,000 boe/d, according to figures shared with reporters at African Energy Week earlier this month.

Now, the ministry says it needs around five years to double output, and policymakers are increasingly throwing their weight behind new gas projects to unlock growth.

"We decided some time ago that gas is the future," Itoua told Commodity Insights in an interview, adding that the government at one point considered branding the need for new gas developments a national emergency.

In the last year, Congo has made strides in bringing new projects onstream. In February, the country exported its first LNG cargo from Eni's Tango floating LNG export facility, having made gas the core focus of its Marine XII project. By the end of 2025, the Italian energy company expects to launch its second floating LNG facility, taking its total production capacity to 4.5 Bcm/ year.

China's Wing Wah also plans to begin gas distribution by December 2025 after scaling up an associated gas unit at its maturing 80,000 b/d Banga Kayo permit, while at least two additional companies are looking at production options, Itoua said.

Oil future

Despite concerns for falling oil production, government officials have been cautious not to undermine the country's oil prospects.

In a new licensing round planned for first-quarter 2025, Brazzaville will invite bids for permits including both onshore and offshore exploration fields with potential for oil and gas, the ministry said, noting that at least one well has already exhibited strong evidence of hydrocarbons.

In a separate interview with Commodity Insights, Maixent Raoul Ominga, head of state oil company Société Nationale des Pétroles du Congo, was eager to highlight lasting oil potential.

"With Eni, there are new prospects that are not only gas," he said, noting a "very interesting discovery" on the company's Marine Permit VI permit, in which SNPC holds a 35% stake.

At the same time, the state oil company has increasingly taken responsibility for picking up old wells to rinse existing reserves, listing its projects with specialist independent Perenco among its most important partnerships.

In 2025, SNPC plans to conduct four workovers to mine value from mature oilfields, Ominga said, including former Eni permit Kouakouala in the Lower Congo basin, which is currently under evaluation. In an example of the types of small oilfields SNPC is seeking to leverage, the Kouakouala was brought onstream in 2000 and was last producing at 1,000 boe/d before production was stopped.

Downstream push

As oil output has shrunk, Congo has been warned by the IMF that its domestic refinery presents an uneconomic use of its flagship Djeno crude and other grades that would fetch higher prices on the global market.

Nonetheless, SNPC has committed to keep operating the small, high cost Coraf refinery after a planned modernization project, while officials have shared hopes that the country's second refinery will perform better.

Set for construction in Pointe Noire, the new plant is intended to scale from 40,000 b/d to 100,000 b/d, reaching four times the capacity of the existing Coraf site. Surplus fuel would likely be exported to Europe, Itoua said.

A Chinese consortium, including Sinopec, is leading the construction of parts for the new refinery, which is 70% complete, according to the minister, who said the site should be ready to start operating by 2026.

Unlike Coraf, the private enterprise will benefit from the freedom to process the most economic feedstock and optimize exports based on market prices.

A new 50,000 b/d Russian-funded oil products pipeline link connecting Pointe Noire to other demand hubs Lutete, Maluco and Trecho will further improve distribution costs, with talks underway around potential extensions to neighboring countries like the DRC and Gabon.

Minister Itoua, who is set to take up presidency of the African Petroleum Producers Organization in 2025, said that forging new cross-border energy links will be paramount for Congo as it pursues long-term hydrocarbon production and legacy trade partners decarbonize.

"APPO is so, so important for us today because of what is happening around energy transition discussion," he said. "We feel that if we are not able to bring the right solution to save our capacity, we will die."