The prime minister and cabinet of Congo resigned on Thursday amid economic turmoil related to three years of low oil prices, according to reports emerging from the region, but the incoming government is poised to increase oil production by one-quarter in 2018.
PM Clement Mouamba submitted his resignation days after President Denis Sassou Nguesso announced the beginning of a process to form a new government.
The ruling Congolese Party of Labor (PCT) won last month’s elections. Afterwards, Nguesso said he would be hiring a new leadership team for his next term. Mouamba, as well as several other key figures in the previous PCT administration, ran unopposed in the last elections.
By 2018, oil projects in the Congo Republic will boost output by 25 percent to 350,000 barrels per day according to a June report by Reuters.
High production costs have forced big African producers like Angola to shutter rigs to avoid breaking the bank. But the Congo has managed to secure investments from French Total and China’s Wing Wah Petrochemical. Together, the two new facilities will add 150,000 bpd of output by the end of next year, according to government figures.
New policies have made investment in nation more profitable. The country recently reduced royalties for oil and gas in a bid to stimulate further investment in the industry. From 15 percent, oil royalties were cut to 12 percent, while gas royalties were slashed from 15 to 5 percent.
“Congo is bucking the trend,” according to Wood Mackenzie analyst Jean-Baptiste Bouzard. "Five years ago, there were uncertainties over the country's remaining potential. ENI changed the game with the Nene Marine discovery.”
Eni’s oilfield will pump out 20,000 barrels of oil equivalent a day by December. But the site has the capacity to reach a 150,000-boed rate in the near future, the company has clarified.
By Zainab Calcuttawala for Oilprice.com
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