The Democratic Republic of Congo isn’t one of the biggest oil producers on the planet, but recent discoveries and continuing exploration indicate a fairly sizable resource supply. As oil companies clash with environmentalists, and prospectors try to evaluate what they may have to work with, the landscape of the DRC’s oil industry is changing drastically. Here are 10 things you didn’t know about oil in the Congo.
Sources: Reuters.com, Medium.com, NYTimes.com, AFKInsider.com, AfricanManager.com, MBendi.com, Telegram.com, OGJ.com, AFKInsider.com
Israeli billionaire Dan Gertler announced in August 2014 that his oil company, Oil of DRCongo (a subsidiary of his Netherlands-based company, Fleurette), had discovered approximately 3 billion barrels of oil around Lake Albert, on the eastern border with Uganda. The amount is equivalent to that of the proven reserves of Britain and South Sudan.
Following the discovery at Lake Albert, Oil of DRCongo representatives estimated that the production of an additional 50,000 barrels a day will expand Congo’s oil economy by 25 percent.
New oil discovered in Eastern Congo would have to be transported hundreds of kilometers to the Indian and Atlantic ocean coasts, and the infrastructure is lacking. This could hold back economic growth. The country will have trouble exporting its product in the volume it might wish to. There’s been talk of a possible oil pipeline from Uganda to the ocean, but tensions between Uganda and the DRC make this unlikely.
Source: Reuters.com
In 2012, the British oil company, SOCO landed a deal with the government to prospect for oil in Virunga, home to the endangered silverback mountain gorilla. Further controversy arose when villagers who opposed the project were beaten by government soldiers. A park warden was allegedly kidnapped and tortured after trying to block SOCO from building a cellphone tower in the park.
In the face of increasing oil activity and companies’ interest in protected forests of Congo, environmentalists have tried to stop further prospecting in those areas. The World Wildlife Fund has been particularly active, signing up hundreds of thousands supporters in a global campaign to block further oil exploration.
In June 2014, the World Wildlife Fund said that SOCO had backed off from its oil exploration in Virunga. However, SOCO sent a private letter to the Congolese government stating its continued work in evaluating the land so “the DRC government can take all appropriate measures to pursue, or not, such exploration.” A few days later, SOCO’s chairman publicly assured investors the company had not pulled out of Virunga.
Apart from the impact oil exploration will have on local wildlife, environmentalists worry about an oil spill at the park’s Lake Edward, which connects to the Nile River. Oil spilled into the lake could contaminate the water supply of millions of people, and could impact ecosystems across the Mediterranean all the way to Spain.
After a successful campaign to boycott conflict minerals from the region, many have called for companies and individuals to divest their interests from SOCO. Others worry that this would lead to economic isolation for the entire country, and that it overstates SOCO’s responsibility rather than attributing some of the problem to the weak institutions and instability of the Congolese government.
The biggest oil companies operating in the DRC include Total-Congo (France), ENI-Congo (Italy), and Chevron Overseas-Congo Ltd (U.S.). Britain’s SOCO International is not one of the largest oil companies in the Congo, but is perhaps the best known over a controversial prospecting deal in Virunga, home to the endangered silverback mountain gorilla.
Following a visit from Stephanie Sullivan, U.S. Ambassador to the Congo, it was announced that cooperation would increase between the U.S. and the DRC with regard to the oil sector. Sullivan said, “We discussed important issues about U.S. companies already working in Congo in the oil sector and others which are interested in it. I now have more knowledge of all aspects that concern the ministry. This will help me examine ways and means to improve cooperation between the U.S. and Congo. The minister informed me that when the exploration license is done, the survey on the environmental impact must be carried out. This too, I learned how it is done in Congo.”
Source: AfricanManager.com