The Republic of Congo is making moves to restore its reputation as an oil producing powerhouse. In fact, the Central African nation plans to become a more influential player in the global fuel market.
According to NJ Ayuk, CEO of Centurion, a leading pan-African corporate law firm, the country has suffered greatly following the global oil collapse.
The collapse refers to a decline in oil prices, which was caused by a boom and rapid efficiency gains in United States shale oil production and a diminished effect of geopolitical risks. The collapse was also due to the inability of the Organization of Petroleum Exporting Countries (OPEC) to regulate global oil supply, and softening demand prospects.
Now, Congolese President Denis Nguesso has pledged that the country would no longer be sitting on the side lines, suffering the effects of global decision-making in the oil industry without a voice. In an official communiqué announcing the bid for OPEC membership, he stated that he wished to place his country in the rank of the world’s leaders.
In January, officials from the Republic of Congo announced the country’s application for membership of OPEC.
“This is no small move. After years of challenges with the collapse in the price of oil, the Republic of Congo is emerging from this period with a renewed agenda, focused on becoming an active voice in the global stage, rather than a silent victim of international oil price swings,” says Ayuk, who was named one of the world’s top energy lawyers by Who’s Who Legal for 2017.
For Congo, OPEC membership means greater access to information, partnerships, contacts and a voice at the decision-making table. But, perhaps more than ever, it is OPEC that is to benefit from the rise in African political voices – particularly that of Congo, argues Ayuk, who is touted as a leading energy lawyer and a strong advocate for African entrepreneurs.
At nearly 2 billion barrels of crude oil of proven reserves in a vastly underexplored territory, Congo represents what the Centurion CEO refers to as a sleeping giant amidst African oil producers.
An improved business climate has brought profound benefits to the country’s oil industry. New developments by French oil company Total in Congolese territory are set to expand the country’s oil output from 280,000 barrels per day to 350,000 in 2018.
An enhanced sector outlook coupled with new discoveries and strong leadership by younger and more capable leaders is rapidly attracting the interest of investors across the world. The election of Thérésa Goma to the position of Congo’s Director General of Hydrocarbons in March is an example of a change in mentality, as is the ascendance of Jean Marc Tchicaya to the position of hydrocarbons minister — a younger and more dynamic figure than any of his predecessors.
Brazzaville is the host city of the headquarters of the African Petroleum Producers Organization, a club that has been gaining renewed relevance in recent years as African leaders search for intra-African cooperation on matters of energy. Congo has also been expanding its bilateral relationships with the likes of Angola, Nigeria and Equatorial Guinea, moving towards a new policy of gas utilization.
The entrance of Congo as an active voice in OPEC can bring a much stronger foothold for the Vienna-based organization in the African oil circle, and reinforce its capability to coordinate production cuts and joint-strategies across the continent when necessary. For OPEC, this means greater representation, greater control over the world’s output, and in the end, greater power.
Ayuk, who was named among Forbes’ Top 10 Most Influential Men in Africa in 2015, cites Equatorial Guinea as a successful OPEC member, emphasizing on what the small nation has achieved in recent months with a change in foreign affairs strategy, thanks to the leadership of Gabriel Obiang Lima, Minister of Mines, Industry and Energy.
Since it joined the OPEC in May 2017, Equatorial Guinea gained a de facto seat at the international negotiating table.
“Suddenly, a nation that produces around 130,000 barrels of crude per day, which is less than 2% of Saudi Arabia’s output, is given a say on international production cuts, price-managing strategies and access to a plethora of contacts and close partnerships that would otherwise be beyond its reach,” states Ayuk.
He says that Congo’s move towards membership of OPEC is a major landmark step that should not only be greeted and celebrated by the cartel, but also be followed by other nations across the continent.
As the world’s remaining frontier market for oil exploration, Africa is increasingly positioning itself as the linchpin region for the future of the world’s energy industry. Ayuk insists that African nations cannot afford to not be at the negotiating table when the great decisions about their future are made, neither can OPEC afford to keep them out.