Amidst a complex scene of corporate entries and exits, Russian international oil company (IOC), Lukoil could be entering the Congolese hydrocarbons market in the wake of Italian energy company Eni’s success on the Marine XII block and elsewhere in the Congo. Purchasing a 25% stake in the region’s operations from London-based explorer, New Age M12 Holdings in 2019 at a cost of $800 million, Lukoil entered into a production sharing contract with block operator, Eni and the National Petroleum Company of the Congo (SNPC) which both hold stakes in the Marine XII block of 65% and 10%, respectively.
Located 20Km offshore Congo, the Marine XII development holds an estimated 1.3 billion barrels of oil and 6 trillion cubic feet (tcf) of natural gas, across a 571 km2 region. Currently, situated in the Marine XII block, both the shallow water Nené and Litchendjili fields are being pumped at a daily output of 28,000 barrels of oil per day (bpd) as well as 1.7 million cubic meters of marketable gas. Three further discovered reserves have yet to be tapped, with peak production for oil estimated at over 100,000 bpd by 2025 and twice the current quotas for gas.
Eni recently announced moves to monetize these abundant natural gas stores through a two-phase, 1.4 million ton per annum liquefied natural gas (LNG) production platform deployment. Developed in partnership with Belgium’s maritime company, Exmar and engineering firm, New Fortress, the project’s stages are marked for completion by Q2 2023 and Q2 2024, respectively.
In a visit to Moscow in late May 2019, the President of Congo, H.E., Denis Sassou Nguesso was presented with a signed letter of intent between Lukoil and SNPC on the terms for the Russian multinational company to enter the Congolese market in the area of hydrocarbons and other sources of energy. Subsequently, a site visit to the capital city of Brazzaville by Lukoil Vice-President, Ivan Romanovsky in May 2021 was accompanied by reassurances of increased investment and expansion of the company’s activities beyond an annual 4 million barrels of oil equivalent (boe).
If Lukoil continues on the same path as Eni in establishing a firm stake in Congo’s LNG area, the move will represent a prominent advancement for the company’s hydrocarbon investment portfolio and a notable development from the Russian firm’s stake in the Cameroon’s Etinde LNG project, previously. At 10 tcf, the Congo’s proven natural gas reserves are more than double than those located in the west-central African country of Cameroon with 4.7 tcf. The Congolese President has expressed full support for Lukoil’s development in the hydrocarbons sector and company president, Vagit Alekperov has noted the attractiveness of such prospects, given the extensive explored reserves, established infrastructure and improvements to technological capacity in the field.
Irrespective of the future operational plans for the firm, Lukoil as Russia’s second largest company with over 101 000 employees and $77 million in annual revenue (2020), will present itself as a major new player in the Congo’s oil and gas sector.