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.