The Republic of Congo has been streamlining its oil and gas licensing processes, as it seeks to fast-track new exploration and foster a more conducive environment to upstream investment. As a result, the country has seen several mergers and acquisitions in recent months, with new players entering and expanding within the market.
Last month, international oil and gas company Trident Energy signed agreements with supermajors Chevron and TotalEnergies to acquire interests in operational fields in the country. Under the agreements, Trident Energy will gain a 31.5% non-operated stake from Chevron in the Moho-Bilondo, Nkossa and Nsoko II fields, along with a 15.75% operated interest in the Lianzi field from Chevron. With the deals expected to be approved by the relevant authorities by the end of 2024, Trident Energy will assume operatorship of the Nkossa and Nsoko II fields after increasing its total stake in the fields to 85%, while also serving as operator of the Lianzi field.
Last March, multinational energy company Eni completed the sale of some of its upstream Congolese assets to independent hydrocarbon producer Perenco for $300 million. The deal was first announced in June 2023 and aligns with Eni’s strategy to streamline operations and focus on its major upstream developments in the country. Both acquisitions reflect the Republic of Congo’s efforts to enhance operational efficiency within the sector, as well as attract junior and independent explorers.
Ramping up upstream activities, Perenco is expected to launch exploration on its Tchibouela II, Tchendo II, Marine XXVII and Emeraude permits after completing an extensive 3D seismic data acquisition campaign last November. Meanwhile, a multi-phase project led by Chinese oil company Wing Wah on the Banga Kayo permit is poised to result in the cumulative production of approximately 30 billion cubic meters of gas over the next 25 years, with the first phase of production set to begin in August 2024.
Exploration and production activities in the country are currently overseen by the Ministry of Hydrocarbons, which is responsible for the implementation and monitoring of government policy and the development of regulatory provisions within the hydrocarbon sector. The sector is governed by the national Hydrocarbon Code and – with the formation of a new Gas Master Plan, a comprehensive update to its Gas Code and the establishment of a national gas company announced earlier this month – the Republic of Congo is well-positioned to reduce bureaucratic hurdles and further improve the ease of doing business in-country.
The Hydrocarbon Code governs the prospecting, research, exploitation and transportation of oil and gas in the Republic of Congo. Companies interested in operating in the country are determined by the Ministry of Hydrocarbons to have the financial and technical capacity to apply for oil and gas permits, which are made through tenders.
Following a tender, research permits are granted by the Ministry of Hydrocarbons and, for companies to conduct research and exploitation activities, Production Sharing Agreements (PSAs) must be entered into with the government. PSAs in the Republic of Congo specify the proportion of oil production by a company, which depends on the scale of activities.