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CONGO-BRAZZAVILLE 2014

THE OIL & GAS YEAR The Who’s Who of the Global Energy Industry

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9781783020867

ISBN 978-1-78302-086-7

Adapt to thriveAndré Raphaël LOEMBAMinister of Hydrocarbons

Future prominenceJérôme KOKODirector GeneralSNPC

Total’s challengePierre JESSUADirector GeneralTOTAL E&P CONGO

ARTICLES | INTERVIEWS | VIEWPOINTS | MARKET ANALYSIS | RESOURCES | PROJECTS | MAPS | INVESTOR SPOTLIGHTS

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8 THE YEAR IN REVIEW

9 INTERVIEW: André Raphaël Loemba, Minister of Hydrocarbons

9 IN PRODUCTION: Regional oil production, 2009-201312 INTERVIEW: Jérôme Koko, SNCP13 THE YEAR’S AWARDS14 CONGOBRAZZAVILLE AT A GLANCE15 THE INVESTORS INDEX16 THE YEAR IN ENERGY

18 DIPLOMACY & POLICY

19 ARTICLE: Infrastructure on the way. The end of Congo-Brazzaville’s civil war in 1999 has paved the way for a stable economy and an influx of foreign investment

20 IN BUSINESS: Ease of Doing Business rankings among sub-Saharan countries

21 INTERVIEW: Florent Michel Okoko , EITI21 IN EXPORTS: Value of Congo-Brazzaville’s oil exports22 INTERVIEW: Christian Barros, Unicongo24 ARTICLE: Natural gas policy in Congo-Brazzaville.

Overcoming obstacles to gas production 25 INTERVIEW: Sylvestre Didier Mavouenzela, Chamber of

Commerce25 IN ACCOUNTS: Congo-Brazzaville’s current account

balance estimates

26 EXPLORATION & PRODUCTION

27 ARTICLE: Projects on the horizon. Congo-Brazzaville seeks to reverse trends of declining production

28 IN CAPACITY: Major oil producers’ estimated yearly production capacity by field, 2012

29 MAP: Hydrocarbons block map30 GEOLOGY REPORT: Congo Basin petroleum geology31 INTERVIEW: Pierre Jessua, Total E&P Congo32 COMPANY PROFILE: Soco EPC33 PROJECT HIGHLIGHT: Mengo-Kundji-Bindi fields

development

34 COMPANY PROFILE: Maurel & Prom35 COMMENT: Near-term trophies. Congo-Brazzaville’s pre-

salt shows potential for future discoveries while Eni, Total and Chevron continue work onshore and in shallow water

36 INTERVIEW: Pierre Narcisse Loufoua, Groupe AOGC36 IN COMPARISON: Congo-Brazzaville crude oil

production and consumption, 2004-201337 COMPANY PROFILE: CNOOC38 INTERVIEW: Cyriaque Etroubeka, Sonarep38 IN PRODUCTION: Actual and predicted oil production

from Mengo-Kundji-Bindi fields

40 THE YEAR’S FOCUS: Moho Nord

41 ARTICLE: A new hope. Total’s $10-billion Moho Nord project is targeting first oil by 2016 and a peak output of 140,000 barrels of oil equivalent per day

41 IN THE GROUND: Reserves of projected offshore field developments in Africa, 2013-2017

42 COMPANY PROFILE: Aker Solutions Congo43 INVESTOR SPOTLIGHT: Hyundai Heavy Industries, Doris

Engineering, Ponticelli Frères44 MAP: Moho Nord watercolour45 INTERVIEW: Kevin Legris, Technip

46 BANKING, LEGAL & FINANCE

47 ARTICLE: Helped by healthy financials. Congo-Brazzaville has established a sovereign wealth fund and is considering new financial options for the development of the sector

48 IN GROWTH: Congo-Brazzaville’s GDP growth rate, 2004-2013

49 COMPANY PROFILE: Société Générale Congo50 INTERVIEW: Emmanuel Le Bras, PwC Congo51 COMMENT: Estimates of fast growth. Outlook for the

CEMAC52 MARKET ANALYSIS: Legal changes a boon for advisers.

Robert Prosper Nken, KPMG Congo53 COMMENT: Eni bets on Congo-Brazzaville. Eni’s activities

worldwide and its opportunities in Congo-Brazzaville

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The Who’s Who of the Global Energy Industry

CONGO-BRAZZAVILLE 2014 THE OIL & GAS YEAR

The Who’s Who of the Global Energy IndustryTHE OIL & GAS YEAR | CONGOBRAZZAVILLE 2014

18Diplomacy & Policy

About 15 years after the end of its civil war,Congo-Brazzaville continues its momentumtowards a more stable political environment.The country has embarked on gradual re-forms of the economy, extending to oil andgas activities. Tax allowances for major oilcompanies and a more relaxed profit-sharingscheme have led to a new influx of foreigninvestment by international oil companies.

26Exploration & Production

With projects such as Total’s $10-billion MohoNord and full-scale production expected in Eni’sNene Marine field in 2016, Congo-Brazzavilleis attempting to stem the steady decline in itsoil production. Eni’s multi-billion-dollar oilsands initiative is also underway in the country.These developments are anticipated tostrengthen the national economy, with inter-national oil companies appearing hopefulabout Congo-Brazzaville’s long-term prospects.

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40The Year’s Focus: Moho NordTotal’s $10-billion Moho Nord project is notonly Congo-Brazzaville’s first deepwater off-shore development but is also the largest fielddevelopment programme the country has un-dertaken. The company is targeting first oil by2016 and peak output at 140,000 barrels of oilequivalent per day by 2017. If this goal is met,it will place Congo-Brazzaville in the top-threehydrocarbons producers in sub-Saharan Africa.

56Engineering & ConstructionActivity has been rife in Congo-Brazzaville’sconstruction industry, especially in the offshoresector. Developments driven by Eni and Totalhave attracted a raft of international contrac-tors to the country. In 2014, competition isfierce and tight margins are prevalent in thedomestic hydrocarbons market. Companiesoperating in the country include Saipem sub-sidiary Boscongo, as well as France’s Technip.

46Banking, Legal & FinanceCongo-Brazzaville is both reforming its leg-islation governing the hydrocarbons industryand seeking to further develop its financialservices sector. By providing a wider rangeof financial options for producers, facilitatedby its legal regime, the government hopesto achieve sustainable economic growth onthe back of its energy wealth, while it is alsolooking to play a more active role in the Eco-nomic Community of Central African States.

54 MARKET ANALYSIS: Sub-contractors’ paradise lost? Roland Bembelly, Cabinet Gomes

55 INTERVIEW: Marc Alexandrenne, Deloitte Congo55 IN OIL RENT: Oil rent as proportion of GDP, 2003-2012

56 ENGINEERING & CONSTRUCTION

57 ARTICLE: Blended oil projects. Major domestic projects are encouraging competition in associated sectors

57 IN EXPENDITURE: Forecasted capex in sub-Saharan offshore sector by operator, 2013-2017

58 IN EXPENDITURE: Forecasted capex in sub-Saharan offshore sector by build process type, 2008-2012 and 2013-2017

60 COMPANY PROFILE: Boscongo60 IN YARDS: Size of Saipem fabrication yards in

southwestern Africa61 PROJECT HIGHLIGHT: Pointe-Noire Fabrication Yard 62 COMPANY PROFILE: Socofran63 COMPANY PROFILE: Renco Congo65 COMPANY PROFILE: Sicim66 COMPANY PROFILE: GNCAC66 IN EXPENDITURE: Capital expenditure in sub-Saharan

offshore sector by segment67 COMMENT: Connections across difficult terrain. A

pipeline project between Pointe-Noire and Brazzaville poses challenges due to lack of infrastructure

68 INVESTOR SPOTLIGHTS: Foselev Congo, Tractafric Equipment Congo, Lassarat Congo, Prozydak

69 COMPANY PROFILE: Subsea 769 IN REVENUES: Subsea 7’s revenues by region in 201370 COMPANY PROFILE: Bouygues Energy and Services Congo71 ARTICLE: Built to last. Congo-Brazzaville’s developing

shipbuilding industry

72 OFFSHORE INFRASTRUCTURE & SERVICES

73 ARTICLE: Offshore, on target. Despite Murphy Oil’s imminent move out of Congo-Brazzaville’s offshore, projectssuch as Total’s Moho Nord are encouraging optimism

73 IN RIGS: Types of drilling rigs in Congo-Brazzaville74 IN RIGS: Global rig utilisation by region, November 2014FOLDOUT MAP: Offshore hydrocarbons infrastructure75 COMPANY PROFILE: Jifmar76 INVESTOR SPOTLIGHTS: Searov Offshore, RK Offshore

Congo, Tidewater Marine International, Petro Services77 INTERVIEW: Benoît Baudet, Bourbon Offshore Surf Congo77 IN DEVELOPMENT: Water depths of major offshore field

developments in West and Central Africa

78 OILFIELD & ASSOCIATED SERVICES

79 ARTICLE: Pre-salt is the name of the game. Services companies eye a slew of new upstream projects as upstream investment spurs on local growth.

79 IN EXPORTS: Major exports destinations of Congo-Brazzaville in 2012

80 IN IMPORTS: Percent changes in import volumes of all items including goods and services, 2011-2015

81 MARKET ANALYSIS: More under the surface. Indira Moudi, Baker Hughes

82 COMPANY PROFILE: Halliburton83 INVESTOR SPOTLIGHTS: SGS Congo, Bureau Veritas

Congo84 COMPANY PROFILE: Weatherford85 COMMENT: Efforts to cap costs. Costs of deepwater

exploration are rising in West Africa86 COMPANY PROFILE: Inter-Continental des Services87 INVESTOR SPOTLIGHTS: Expro Worldwide BV Congo,

Air Liquide88 ARTICLE: Look local. Congolisation is a slow process that

will benefit all industry actors in the country89 COMPANY PROFILE: Servtec90 COMPANY PROFILE: Prezioso91 VIEWPOINT: A promising market. Fabio Ottonello, Group

Otto92 INVESTOR SPOTLIGHTS: Scab Congo, Apave Congo,

SPIE Oil and Gas, Iota Group93 MARKET ANALYSIS: Add local value. Pierre Balmefrezol,

Ogas Solutions

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The Who’s Who of the Global Energy IndustryTHE OIL & GAS YEAR | CONGO-BRAZZAVILLE 2014 www.theoilandgasyear.com

The Oil & Gas Year is audited by BPA Worldwide


94 PORTS & LOGISTICS

95 ARTICLE: Infrastructure impulse. Congo-Brazzaville’s infrastructure requires substantial work

96 IN TRANSIT: Congo-Brazzaville’s Logistics Performance Index rankings, 2010-2014

98 INTERVIEW: Pierre Bellerose, Bolloré Africa Logistics Congo

98 IN COSTS: Import cost per twenty-foot container, 201399 COMMENT: Joint forces. Total teams up with Qatar

Petroleum International on the Moho Nord project100 MARKET ANALYSIS: Point of entry. Denis Cordel,

Necotrans Congo101 COMMENT: A transport corridor. The development plan

of the port of Brazzaville102 COMPANY PROFILE: NileDutch Congo103 COMMENT: African ports out of step. Africa needs bigger

port infrastructures 104 INTERVIEW: Alain Ludovic Okoi, ILOGS105 COMPANY PROFILE: TLC CONGO105 IN SHARES: Ownership of the Lianzi field106 COMPANY PROFILE: Chemin De Fer Congo-Océan107 VIEWPOINT: Improved logistics. Andrew Colquhoun,

Fortis Logistique108 INTERVIEW: Frederik De Vos, SCLOG

108 IN CREDIT: Getting Credit rankings, 2014109 MAP: Regional logistics network

110 GAS, POWER & DOWNSTREAM

111 ARTICLE: Electrification as enlightenment. Congo-Brazzaville is attempting to change the structure of its power supply by increasing the share of natural gas

111 IN RETAIL: Service stations by brand in Congo-Brazzaville, April 2014

113 COMPANY PROFILE: Gas Management Congo113 IN VOLUME: Storage of petroleum products by city, 2013114 PROJECT HIGHLIGHT: Litchendjili Gas Plant115 INVESTOR SPOTLIGHTS: Dietsmann, Puma Energy, X-

Oil Congo, Total Distribution

116 EXECUTIVE GUIDE

117 ACCOMMODATION121 EVENTS123 ACKNOWLEDGMENTS | ADVERTISERS INDEX124 IN BRIEF

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The Who’s Who of the Global Energy IndustryTHE OIL & GAS YEAR | CONGO-BRAZZAVILLE 2014

94Ports & LogisticsAs Congo-Brazzaville attempts to reverse arecent trend of declining oil production, whilealso diversifying its economy away from itsdependence on hydrocarbons, pressure on itslogistics infrastructure is mounting. Much ofthis network is uncompetitive, which is neg-atively impacting the country’s oil and gas in-dustry. A number of projects are underwayto try to improve the transport environment.

110Gas, Power & DownstreamCongo-Brazzaville has increased the share of gasin its electricity production from close to zero in2004 to 37 percent by the end of 2011, accordingto the World Bank. The development of the powergeneration sector in the country has been drivenby this increase in the usage of natural gas, along-side an expansion of its hydropower capacity.Government policy to develop power-generationinfrastructure has set the country on the path to-wards achieving stable economic development.

78Oilfield & Associated ServicesCongo-Brazzaville is expected to surpass Equa-torial Guinea to become sub-Saharan Africa’sthird-largest oil producer by 2017, encouraginga number of international services providersto enter the market. 2015 and 2016 are set tohost a flurry of new activity, but as drilling willbe conducted largely in subsea basins off thecoast of the country and transportation net-works centre on the Pointe-Noire port, theseprojects are expected to be logistically sound.

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Exploring knowledgeExtracting intelligenceRefining communicationINTERNATIONAL


9 Adapt to thrive12 Future prominence

Jérôme KOKODirector GeneralSOCIÉTÉ NATIONALE DES PÉTROLES DU CONGO

13 The Year’s Awards

THE YEAR IN REVIEW


What does the launch of a new bidding roundmean for Congo-Brazzaville?We have redrawn the division of the blocks inthe country, including the coastal and interiorbasin. During one of the country’s largest con-ferences held in Brazzaville in April 2014, theministry made information on the free blocksavailable to potential investors.

We must renew our reserves. To do that, weneed to encourage exploration in open permitsis needed. These 10 new blocks will be offeredfor bid after the new hydrocarbons law is passed.

Does the Hydrocarbons Code need a revision?Congo-Brazzaville’s Hydrocarbons Code datesback to 1994. Many things have changed in thelast two decades in the global petroleum industry,so we must adapt our legal and fiscal frameworkto the economic, technological, environmentaland social challenges of the world in 2014.

In Congo-Brazzaville’s case, after 30 years ofproduction, many of the oilfields have reachedtheir mature phase. We must create a law thatputs an emphasis on renewing our reserves andbattling the natural decline of these fields. Weneed new attractive legal and fiscal frameworkthat is balanced, taking into consideration theglobal trends of the oil and gas industry.

How is the use of natural gas factored in?This subject is important and strategic for thecountry, and we are taking measures that willallow us to augment our gas reserves, includingaddressing them in the new Hydrocarbons CodeI believe Congo-Brazzaville’s natural gas will beeffectively used in a number of ways.

Firstly, it will be used to create electricity,which is a fundamental necessity for the devel-opment, modernisation and industrialisation ofour country. The power plant at Côte-Matève,which has a capacity of 300 MW, will undergo alarge expansion. This expansion will occur inparallel with the increase in gas production fromthe Marine 12 permit, operated by Eni Congo.

Secondly, LPG, butane and propane will bea large part of this initiative. We must increaseour production capacities, transport and distri-bution so that LPG can be distributed to allcorners of Congo-Brazzaville. As a result, we willdecrease reliance on wood as an energy source.

Thirdly, studies are underway to determine thecost of using gas to create urea and ammonia.Depending on the reserves, it could also bepossible to build an LNG export terminal. A gasmaster plan is being developed, which will allowus to adapt a strategy that takes into considerationour reserves as well as the needs of the country.

What is the importance of the three majorprojects underway in the country?Total’s Moho Nord, which is the largest projectever established in Congo-Brazzaville, will notonly bring us additional reserves, but also a highlevel of activity with first oil expected in 2016.Eni Congo’s Litchendjili development will allowus to ensure sustainable natural gas supplies forthe power plant at Côte-Matève. Finally, Chevron’sLianzi development, which has been green-litas a result of a unitisation agreement betweenCongo-Brazzaville and Angola, reinforces the re-lations between the two countries.

We are putting a strong emphasis on localcontent with all these projects, notably the re-cruitment of local personnel, training and de-velopment of Congolese competence and theuse of local fabrication yards and shore bases.

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In addition to reviewing its Hydrocarbons Code in April 2014, Congo-Brazzaville’s Ministry of Hydrocarbons also announced intentions to have a newbidding round for 10 permits. Minister of Hydrocarbons André Raphaël Loembatalks to TOGY about how law revisions and new exploration activities are set toraise the Central African country’s international oil and gas profile.

Adapt to thrive

André Raphaël LOEMBAMinister of Hydrocarbons

IN FIGURES

Number of permits to be offered in bidding round

10First oil from Moho Nord

20160

50

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150

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250

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350

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Congo Gabon Equatorial Guinea

2010 2011 2012 2013

Source: BP Statistical Review 2014, MMIE

Regional oil production, 2009-2013(thousand barrels per day)

PRODUCTIONIN

Many thingshave changed in the

last two decades in the global

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our legal and fiscalframework.

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How will revisions to Congo-Brazzaville’s hy-drocarbons law change SNPC’s role?SNPC needs to play a more central role amongall the players involved in Congo-Brazzaville’shydrocarbons industry. For example, there areoil and gas production permits underway in2014 in which SNPC has no role at all.

In the future, this should no longer be pos-sible. It should be necessary for us to participateeither as an operator or as a participant.

The end goal is not to merely participate,but to be the operator. For this reason, wethink that the new law should reinforce SNPC’srole and enable it to be a true main actor in thehydrocarbons industry. Of course, it should dothis without excluding our partners, which havemuch more experience in the field than ourcompany does and with which we hope tocontinue to work in the coming years.

A pipeline from Pointe-Noire to Brazzavillehas been a topic of discussion in the industrysince at least 2010. What is its status in 2014?It is true that we have plans to build a pipelinefor finished products from Pointe-Noire to Braz-zaville, and from there up into the north of thecountry. It is expected to stretch more than500 kilometres. Yet, in 2014, we are transportingfinished products by road and railway.

I am not saying that such forms of trans-portation will be discontinued. Road travel isfine over short distances, but long distancescreate risk. Railway transport, since we onlyhave a one-track railway, causes delivery delays.A pipeline will allow us to transport finishedproducts with fewer obstacles.

This pipeline will change drastically, if notrevolutionise, the supply of our country’s interior,and maybe even that of bordering countries,such as the Central African Republic, Cameroonand the Democratic Republic of the Congo.The latter of these is in 2014 one of the biggestsupply routes for finished products.

The project is being managed entirely bySNPC. We are financing studies that are alreadyunderway and should be finalised by 2015.Then we will have an estimated cost for theproject, which we will begin with right away.

For now we have not had any offers or in-terest from other parties that would like to join

us. For us this project is both commercial andpolitical. That is why we are committed to push-ing it forward ourselves, even if we had hopedthat there would be other partners.

What is the background of SNPC in Congo-Brazzaville and how do you see the companychanging in the next five years? SNPC was created to participate in the hydro-carbons industry and also in the developmentof Congo-Brazzaville at large. Previously SNPCheld non-operating interests in acreage ratherthan acting on the production side.

We participate in permits with other majorcompanies that work here in Congo-Brazzaville,notably with Eni, Total and Chevron. However,in 2010 SNPC became an operator on the on-shore Mengo-Kundji-Bindi development.

In 2014, we are producing around 700barrels of oil per day from the Kundji pilotproject site. This is done through our upstreamsubsidiary Sonarep. We have drilled our ownwells at the site using our drilling subsidiarythe Société de Forages Pétroliers.

By 2019, we hope to reach 15,000 barrelsof oil per day on the three fields (Kundji, Mengoand Bindi) after full field development.

In addition to our activities in the upstreamsector, we are responsible for the sale of petro-leum that comes back to the state throughroyalties and shared production.

We also supply the country with finishedpetroleum products from our Congolaise deRaffinage refinery. The facility processes twocategories of Congolese oil: Djeno Melangeand N’Kossa Blend, which are the main crudesproduced in Congo-Brazzaville.

What are some of your expectations for thecompany during 2015? What specific targetsdoes SNPC hope to surpass by that time?By August 2015, the company will have takena giant step forward, in that we will havelaunched, together with our partners, the firstdrilling site in the Cuvette Basin.

SNPC will have finished studies on thepipeline set to run from Pointe-Noire to Braz-zaville and may have already undertaken theconstruction. The company also aims to establishitself as a prominent oil and gas operator.

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Founded in 1998, the state-owned Société Nationale des Pétroles du Congo (SNPC)is Congo-Brazzaville’s state integrated oil and gas company. Its primary operationsare in the production, refining and transportation of petroleum. Jérôme Koko, theSNPC’s director general, speaks with TOGY about a possible pipeline from Pointe-Noire to Brazzaville and the role of SNPC in the future of the local oil industry.

Future prominence

Jérôme KOKODirector GeneralSNPC

IN FIGURES

2014 first-semester averageproduction at Kundji site

700 barrels of oil per dayFive-year goal from Mengo-Kundji-Bindi project

15,000 barrels of oil per day

The end goal isnot to merelyparticipate, but tobe the operator. Forthis reason, we thinkthat the new lawshould reinforceSNPC’s role.


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In May 2014, shipping agency Necotrans was awarded operatorship of the river port in Braz-zaville, signalling a milestone in the development of the capital city as a major transshipmentpoint for the region. The port project will require nearly $20 million in investment and isplanned for completion in 2015. Not only does this expansion assist Brazzaville in becoming aprimary hub in a transport corridor to the Central Africa region, but it will also support thoseoperating domestic exploration programmes in the country’s vast and undeveloped hinterland.

MAN OF THE YEAR

André Raphaël LOEMBA

Hydrocarbons activity and investment in Congo-Brazzaville between2013 and 2014 may have exceeded anything the country’s industry hadwitnessed previously. The beginning of Total’s $10-billion Moho Nordproject, easily the largest offshore project in the history of the country,confirms to the industry that Congo-Brazzaville is a safe destination forlarge-scale investments, and that it is doing the right things to foster de-velopments of the sort. The discovery of Eni’s immense Nene Marinefield, the advent of a key exploration bidding round and the restructuringof the country’s hydrocarbons law, too, have fallen under the authority ofthe Ministry of Hydrocarbons and Minister André Raphaël Loemba.

Valued at $10 billion, the Moho Nord project (Total, 53.5 percent, Chevron, 31.5 percent andSociété Nationale des Pétroles du Congo, 15 percent) is having a major impact on the Congoleseeconomy and on local companies. While much of the activity is set to roll out in 2015 and 2016, theproject is already breaking records on many fronts. Moho Nord is the largest offshore investment inthe country, the first time Total has connected a tension-leg platform to a floating production unitand, at the time of awarding, was the largest subsea project undertaken by France’s Technip.

OFFSHORE PROJECT OF THE YEAR

In 2014, national oil company Société Nationale des Pétroles du Congo has found itself in themidst of its first onshore development project as an operator. As the largest upstreamdevelopment project onshore, the MKB Development has seen the company drill six wells inthe acreage. By 2016, it expects to be producing at least 5,000 barrels of oil per day from closeto 40 wells. This represents a more than seven-fold increase from production in 2014 of 700barrels of oil per day. Investment in the surface equipment for the field will total €32 million.

ONSHORE PROJECT OF THE YEAR

Although originally announced in 2013, the 1.2 billion barrels of oil and 42.5 bcm (1.5 tcf) ofgas that constitute the Nene Marine discovery are still undergoing development drilling in2014. Not only was the find one of the largest discoveries in the world in 2013, it was also a sig-nificant step in the pre-salt domain for Congo-Brazzaville. The shallow water discovery, insome 27 metres of water, was made in a block with a 20-year exploration history, indicatingthat new technology and a new perspective can breathe new life into the country’s acreage.

DISCOVERY OF THE YEAR

In 2010, discussions began between the governments of Congo-Brazzaville and Qatar on whatprojects or opportunities may be ripe for investments in the Central African country. Consideringall the projects that were on the table domestically, Total E&P Congo proposed to QatarPetroleum International to increase its own capital, in order to facilitate new investments.Qatar Petroleum International’s investment in Total E&P Congo, representing a 15-percentshare capital increase, is directed at existing facilities, alongside projects such as Moho Nord.

INVESTMENT OF THE YEAR

CONTRACT OF THE YEAR


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