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Country Profile of Conventional and Renewable Energies:

Congo, Republic of the

Last updated on 20/09/06

Prepared by

Maria-Evangelia Kaninia Intern from August to …, 2006

For the

Department of Economic and Social Affairs

Statistics Division Energy Statistics Section

United Nations, New York

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1 Executive summary

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2 Introduction and Overview

2.1 Brief Country Facts (source: [CIA], [STA], [EIU])

2.1.1 Geographical data

Figure 1 Map of Congo (R), source: [CIA]

- Location: Western Africa, sharing the natural border of the river Congo with the Democratic Republic of Congo, which lies to its south-east

- Surface area: 342,000 sq km, approximately 1% of the entire surface of Africa, approximately 92% of the surface of Germany; less than 2% is cultivated

- Terrain / topography: coastal plain, southern basin, central plateau, northern basin - Climate: tropical, two distinct seasons (dry and rainy)

2.1.2 Population - Total population: about 3.7 million as of July 2006; [EIU] provides an estimate of 4.1

million for 2006 (demographics intensely distorted because of the high AIDS-related mortality); population concentrated in the southwestern portion of the country; intense urbanization: 70% of its total population living in the capital Brazzaville, Pointe-Noire, or along the 332-mile railway connecting them

- Growth rate: as of July 2006, estimated at 2.6% or 2.8% according to [EIU]

2.1.3 Political situation The country obtained independence from France in 1960. A regime based on Marxism

was abandoned in 1990, to be followed by a democratically elected government taking office in 1992 and the restoration to power of the former Marxist president in 1997 after a brief civil war that ended with ceasefire agreements in late 1999. The period of ethnic and political unrest that followed ended with a peace accord signed in March 2003, but there is still tension and an ongoing refugee crisis (in late 1999, one third of the population was displaced).

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2.1.4 Economical situation Despite civil unrest, Congo managed (since the 80s) to develop its hydrocarbon industry

which is the primary source of economic growth (accounting for 94% of total export earnings according to [EIA]). Timber from the rain forests is the next most significant commodity. The oil revenues financed development projects in the early 80s, leading to a rising GDP. However, the fact that the government took out loans by partially mortgaging its oil revenues led to increased external debt, especially when the civil war erupted in 1997, bringing the economic reform efforts (which were backed by international organisations such as the World Bank and the IMF) to an end. Recently, the advent of peace and the recovery of oil prices have stimulated the GDP growth. Simultaneously, a three-year Poverty Reduction and Growth Facility (PRGF) with the IMF was out for the country, with a view to acquire eligibility for the heavily indebted poor countries (HIPC) initiative (see [IMFa]). Congo reached the HIPC decision point in 2006, according to the World Bank country brief (see [WCB]).

2.1.4.1 Vital statistics (2005 estimation, [CIA]) - GDP (PPP): $4.6 billion - GDP growth rate: 8%, projected by the [WEO] to remain at 7.4% for 20061 and then fall

sharply at 1.6 for 2007 - GDP (PPP) per capita: $1,300 - Inflation rate (consumer prices): 2.2% - Main exports: petroleum (which accounts for 90% of the total export earnings), lumber,

plywood, sugar, cocoa, coffee, diamonds (to China [45.7%], US [34%], Taiwan [4.2%], others)

- Main imports: capital equipment, construction materials, foodstuffs (from France [30%], China [13.2%], US [9.5%], Italy [8.1%], Belgium [6%], Netherlands [4.5%], others)

2.2 Overview of the Energy Sector The authority in the energy sector is shared between: The Ministry of Mines, Energy and

Water Resources (Ministère des Mines, de l'Énergie et de l'Hydraulique), the Ministry of Hydrocarbons (Ministère des Hydrocarbures) and the Ministry of Forestry and Environment (Ministère de l'Économie Forestière et de l'Environnement), none of which had a dedicated official web site on the date of last update. The listing of the ministries was retrieved from [IZF].

2.2.1 Production, trade and consumption of commercial energy The economy of Congo is heavily reliant on the oil industry (sixth largest producer in Sub-

Saharan Africa for 2004 with 2.5% of the total African production), which defines almost exclusively the energy sector, although output has recently been on the decline (see Figure 2).

Table 1 draws attention to two facts: o Overall, Congo is a net energy exporter. It does import a small quantity of oil

products, of which, however it exports more in terms of energy equivalency; this is probably due to the fact a certain class of oil products cannot be locally produced in sufficient quantities (probably because of the quality of the crude oil or the capacity of the sole refinery of the country).

o Electricity imports are, though, an important aspect, since the locally generated electricity is almost equal to the imports. Foreign investment in the mining industry of the country depends on the abundance of electricity, and the non-industrial demand (mainly residential) is bound to increase. Therefore as is developed in the respective sections, Congo has the potential to utilize its renewable resources to cover this demand.

1 [EIA] provides an estimation of 4.6% growth for 2006.

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2004,[IEA] 2003,[EIAa]2

ktoe crude oil oil products gas hydro

combustible renewable and waste electricity

Inland Production 11895 3030 34 656 Imports 52 35 Exports -11328 -281 TPES 567 -229 923 34 35 Transformation Processes -567 537 -34 -225 -8 TFC 309 431 27

Industry sector 7 14 Transport 270

Residential 26 431 13 Other 7

electricity generated in GWh 398

Table 1 Simplified energy balance table for 2004, source: [IEA]

2.2.1.1 Oil According to 2006 estimates by the Oil and Gas Journal quoted by [EIA], Congo has 1.5

billion bbl of proven oil reserves (close to, but less than 1‰ of the global reserves). The oil production for 2004 amounts to almost 12,000 ktoe or 26‰ of the total production

in Africa or 3‰ of the global production. Since 2000, when it peaked at 280,000 bbl/d, the output has been on the decline4, reaching an average of 227,000 bbl/d in 2005 (according to [EIA06]). However, it is expected to rise as new fields come online.

Oil Production in 000 bbl/d, source: [EIA]

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Figure 2 Oil production timeline, source: [EIA] The reserves are mainly located offshore5. Because of the deterioration of the existing

reserves, exploration activities are switching their interest towards ultra-deep (and thus more

2 The energy balance published by the IEA ([IEA]) has a zero figure in the gas column,

therefore this column has been completed with EIA data.. 3 Corresponds to “Marketed Production”, according to [EIA] methodology. 4 The primary operator, Total of France (see [TOT]), reports that all the fields they

operate “have entered their phase of maturity or decline”. 5 Refer to Figure 6 for a map of the off- and onshore oil fields.

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expensive in their exploitation) offshore permits in order to make up for lost ground (see [TOTa] and [TOTb], both describing recent successful exploration activities of Total, the leader in foreign investment in Congo, in partnership with other foreign companies and, in the second case, with the state company).

In 2004, approximately 95% of the crude oil production was exported via the terminal located in Pointe Noire to Western Europe (mainly France) and the United States.

Congo's sole refinery, Congolaise de Raffinage (CORAF) (see [WN00]) was commissioned in 1974 and began operations two years later in Pointe Noire. The nameplate capacity of the refinery is 21,000 bbl/d (or 1,050 ktoe/y), but the refinery often operates at 50%-55% of its capacity, with prolonged periods of inactivity. Warfare from 1997 through 1999 severely disrupted the supply of CORAF fuel to the national market and led to an increase in fuel imports. It resumed activity in 2000. In 2004, it covered almost the entire inland demand for oil products, also allowing for exports.

2.2.1.1.1 Sector Organization All oil production and exploration activities are regulated by the national oil company

(Société Nationale des Pétroles du Congo – SNPC; see also [EIU]), established in 1998 to take over the upstream activities from its predecessor, Hydro-Congo. Exploration and production assets were formally transferred to SNPC in February 2000. SNPC defends the government’s interests by developing production sharing agreements with the foreign companies operating in Congo. The role of SNPC is politically highly charged and a part of the oil revenues is suspected to be diverted to off-budget or unrecorded expenditure. The SNPC has also acted as an intermediary in order to secure loans from western investment banks on behalf of the government (reported by [EIU]). No clarification has been found as to the relationship between SNPC and the Ministry of Hydrocarbons.

[AFEN] reports that in 1994, Congo enacted new hydrocarbon legislation offering production-sharing agreements (PSA) to foreign oil companies. Under the PSA, foreign oil companies act as contractors for SNPC. The PSA are intended to ensure a constant minimum flow of revenue to the government, commensurate with similar agreements between other regional oil exporting states and major oil companies. Contractors (foreign oil companies) finance all investment costs, and recover their investments when production begins. In 1995, foreign companies were given the option of converting existing exploration and production agreements to PSA. All major operators in Congo have signed PSA for their respective field developments. The particular formulae of the Congolese PSA result in approximately one-third of the oil produced going directly to the government and being sold by the SNPC on the state's behalf ([EIA]). An OECD report explains the structure of the PSA (see [AEO]).

The downstream sector (fuel distribution and sale) as well as the refining activities was held by Hydro-Congo until 2001, when it was purchased by foreign investors who formed a new company, Société Commune de Logistique Pétrolière (SCLOG).

Foreign operators: Primary foreign operators in Congo include, according to [EIA], Total6 (France), which holds a dominant position, controlling 45% of the country’s output (in 2004) and the largest field (N'Kossa) (see [AFEN]), Eni (Italy), controlling 25%, Burren Energy (UK), Perenco (UK) and Maurel and Prom (France).

Field development and Exploration (see [EIA] and [AFEN]): o Total, as the leading oil producer and foreign investor in Congo, plans to double

its current production of approximately 91,000 bbl/d (or 45% of the total output), once the new offshore fields (Moho and Bilondo, located in the Haute Mer permit area) come online in 2008. Total has a 53.5% stake in this project which is operated in partnership with Chevron and the state-run SNPC. Total also plans to develop two N'Kossa satellite fields. The output of these fields will include 45

6 Total operates in Congo through its subsidiary Elf Congo (of which the government has

a 20% share). A list of the held stakes can be found at [MBENDIa].

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million cubic feet per day, as reported in [AFEN]. Total is currently exploring several other permits ([AFEN] provides details).

o Maurel and Prom hold an exploitation permit for the M’Boundi field (see [MP] and Figure 7), which is considered to be one of the biggest onshore oil fields in West Africa at 1.3 billion bbl. The output in (startup) year 2002 was 10,800 bbl/d [MP] increasing to 57,000 in 2005 ([EIA]) and with further potential from wells tested by the partners of the operating firm. The company hopes to increase output to 73,000 by 2007.

o Further minor fields are reported by [EIA] to be in testing phase. The mentioned operators include Heritage Oil of Canada (who has though already sold its interests in the country as reported by the company site), Murphy Oil of the United States and several others.

2.2.1.1.2 Summary Oil output peaked in 2000 at 280,000 bbl/d. The decline since then is due to the

exhaustion of old fields and the delays concerning the coming on-stream of new ones. However, since many international companies are very active7 in their exploration activities, the oil sector is expected to be the primary source of income for several decades.

2.2.1.2 Gas According to [WN00] and [EIA06], Congo contains an estimated 3.2 trillion cubic feet of

natural gas reserves as of January 2006 (which constitutes the fourth largest deposit in sub-Saharan Africa). The majority of gas fields are associated with oil fields, which results in 61% ([EIA], 2004) of the gross production being reinjected. Another 36% is disposed of, because of lack of infrastructure for its monetization, resulting in only 3% actually being marketed.

According to [EIA06], the Moho/Bilondo oil project operated by Total (see 2.2.1.1) is also expected to have an associated output of 45 million cubic feet /day (equivalent to a yearly production of 16 billion cubic feet or an increase of +12%) when it comes on stream.

2.2.1.3 Electricity Electricity is provided by the parastatal (characterized as such by [EIA05]) utility Société

Nationale d'Electricité. The government has tried to privatize the state company, as reported by [IEPF], but the interest of potential investors is decreased because of the damages inflicted on the structure during the warfare.

In 2003, as reported by [EIA06], Congo had total electric generation capacity of 120MW, which primarily came from hydropower (92 MW or 77%). The main hydro plants are the 74MW Bouenza or Moukoukoulou (actually reduced to 55MW because of lack of proper maintenance) and the 15MW Djoué.

Before the completion of the gas fueled thermal plant at Djeno (see below, list of projects), there were two large-scale thermal units, fueled with diesel. One of them, located in Pointe-Noire (19MW) is rarely used as backup at a fraction of its nominal capacity. The second one in Brazzaville (9,4MW) is out of order (as of 2002 according to [IEPF]). The data retrieved from [EIA] (see Figure 1) confirm that the existing thermal plants are virtually not in operating condition, since they have only generated 1 million KWh per year since 2000.

Figure 3 shows the increasing dependence on imported electricity. Since 2002, the share of imported (from the neighbouring Democratic Republic of Congo) and locally generated electricity is almost equal. In terms of power, Congo has to import about 75 MW.

7 A listing of current news concerning exploration activities can be found at [GOG].

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Electricity generation, consumption and imports (b kWh)

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Figure 3 Timeline of electricity generation, consumption and imports, source: [EIA]

electricity generation by type, source [EIA]

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Figure 4 Electricity generation by type, source: [EIA] The north of the country is supplied through small thermal generators. [EIA06] reports on the following projects (recently

completed or under construction) aiming to expand generation capacity:

o 25MW thermal plant at Djeno, where a pipeline terminal is located, fueled with natural gas from offshore fields. The plant is reported to have been completed in 2002 by Agip and

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Chevron8 and was built with the aim to supply the city of Pointe Noire. o 120MW of hydropower at Imboulou on the Lefini River (bound to be completed

by 2009). The project is undertaken by two Chinese companies and is only partially financed by the Congolese government (see also section 3.1.1).

o 32.5MW thermal plant in Brazzaville constructed by Anglo Belgian Corporation of Belgium and bound to come online by 2006 in order to alleviate the electricity scarcity in the heavily populated capital.

2.2.2 Household/Commercial Access to Electricity According to [WRI], as of 2000, only 20.9% of the population had access to electricity,

which is lower than the average of the entire Sub-Saharan Africa (24.2%). However, the World Bank country brief mentions even lower percentages for 2006: “…

less than 20 percent in urban areas and less than 5 percent in rural areas”. According to [AFRIKa], the network only extends from the capital Brazzaville to the port of Pointe Noire, only covering the southern part of the country.

[REN21] reports the existence of a specialized agency (Agence Congolaise d'Electrification Rurale) under the Ministry of Mines, Energy and Water Resources. The stated purpose of the agency is to “reduce poverty by improving living conditions in isolated village communities through decentralized rural electrification”.

2.3 Overview of Renewable Energy The most important asset of Congo in terms of renewable energy is its hydraulic

resources, which so far have only been utilized to a limited extent for electricity generation. Fuelwood is extensively used to cover residential needs.

2.3.1 Legislative and institutional structure No authorities dedicated specifically to the development of renewable energy exist, and

the issue does not seem to be prioritized. The external donors (see [WCB]) do not promote yet RE related projects either.

3 Analysis of Renewable Energy Sector9

3.1 Analysis of Different Types of Renewable Energy

3.1.1 Hydro A report (September 2001, see [CIN]) gives an estimate of 2500MW of hydroelectric

potential. The sites concerned are mainly along the Kioulou river in the south and the Imboulou site on the Lefini river in the south.

3.1.1.1 Achievements The current electricity generation capacity of Congo relies heavily on its hydraulic

resources. The two existing plants (Djoué –in operation since 1951- and Moukoukoulou –since 1978-, both situated in the southern part of the country) are both in need of rehabilitation.

8 Since [EIA] does not record the respective electricity that would be generated if the

plant had been in operation since 2002, it can be assumed that either the plant is not in operation or that the output is for “own use” of the companies that assumed its construction.

9 A general assessment of the RE sector in Africa can be found in [RENAFR].

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3.1.1.2 Ongoing or planned projects The construction of a 125MW plant at Imboulou (200 km north-east of Brazzaville) has

already started (see page 7). The estimated cost of the project, which is undertaken by the government in cooperation with a Chinese consortium, is $280 million. 85% of the cost will be taken in charge by the Chinese, in the form of a low-cost loan over 15 years, while the rest will be provided by the government.

Expansions in the oil industry and other areas of the Congolese economy have led to the revival of the Sounda Gorge (located at the confluence of the Niari and Kouilou Rivers, approximately 85 miles north of Pointe Noire) hydro-electric power project first mooted in 1952, as reported by [MBENDI]. The development of the $925 million, 1-gigawatt (GW) Sounda Gorge hydroelectric project had been stalled. The project would involves three phases: two turbines providing 10 MW to generate income for the following phases; a 130-foot dam boosting capacity to 240 MW; and an increase in the height of the dam to 200 feet to yield the 1 GW capacity. The above was reported by [EIA05], but any reference to this project is omitted in the more recent report compiled by the EIA ([EIA06]).

Another project directly involved with the development of the mining industry is the construction of a 180MW plant on the Kouilou River by Magnesium Alloy Corporation of Canada (also reported in [EIA05]).

The official quoted in [AFRIKa] mentions that electric plants are also planned at Liousso in the north and Mourala in the south-east. No further details have been provided.

3.1.2 Biomass As is often the case in post-conflict countries, a large percentage of energy needs is

covered through use of fuelwood, even though the population is highly urbanized.

Combustible renew ables and waste (% of total energy) (source: [WDI])

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Figure 5 Biomass and combustible waste (% of final energy use), source [WDI]

3.1.2.1 Biomass other than fuelwood Congo is known to produce sugar, but no solid references have been found

4 References / Sources - [CIA] https://www.cia.gov/cia/publications/factbook/geos/cf.html, CIA World Factbook,

accessed on 14/09/06 - [AFRIKa] http://www.afrik.com/article6624.html, “Vers l’autosuffisance électrique,

Construction du plus grand barrage du Congo”, interview of 30/09/06, accessed on 22/09/06

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- [AFRIKb] http://www.afrik.com/article5904.html, La Chine éclaire Brazzaville, report of 03/04/03, accessed on 22/09/06

- [AEO] African Economic Outlook 2004/2005, www.oecd.org/dev/aeo - [IEPF] Institut de l’Énergie et de l’Environnement de la Francophonie,

http://www.iepf.org/docs/hydro_quebec/pays_et_entreprises/afrique/congo/congo.html - [STA] http://www.state.gov/r/pa/ei/bgn/2825.htm, State Department, Background,

accessed on 14/09/06 - [GOG] Gulf Oil and Gas, Congo News Archive, accessed on 22/09/06,

http://www.gulfoilandgas.com/webpro1/Main/NewsCTRY.asp?nid=CG - [EIA06] http://www.eia.doe.gov/emeu/cabs, Energy Information Administration, Country

Analysis Briefs, accessed on 14/09/06, report updated in May 2006 - [EIA05] http://www.eia.doe.gov/emeu/cabs/congo.html, same source, earlier version of

the above report, updated in June 2005 o [EIAa] http://www.eia.doe.gov/emeu/world/country/cntry_CF.html, detailed

country energy balance by type of energy commodities (year 2003), accessed on 15/09/06

o [EIAb] International Energy Outlook 2006, available online at http://www.eia.doe.gov/oiaf/ieo

- [IMF] http://www.imf.org, International Monetary Fund, Country Info, accessed on 28/08/06

o [IMFa] “Republic of Congo: Enhanced Initiative for Heavily Indebted Poor Countries - Decision Point Document”, April 2006, IMF Country Report No. 06/148, available online at http://www.imf.org/external/np/exr/facts/hipc.htm, accessed on 15/09/06

- [WEO] World Energy Outlook, April 2006, available online at http://www.imf.org/external/pubs/ft/weo/2006/01/index.htm, accessed on 15/09/06

- [IEA] “Energy Balances of non-OECD countries 2003-2004”, 2006 edition - [AFEN] report on energy by Africa Energy, accessed on 21/09/06 at http://www.africa-

energy.com/html/public/data/congo-b.html, last update in July 2003 - World Bank

o [WDI] http://devdata.worldbank.org/dataonline/, database accessed on 19/09/06 o [WCB] Country Brief, last update August 2006, accessed on 21/09/06

- [EIU] Economist intelligence Unit Country Data, Country profile, updated on 09/03/06, accessed on 20/09/06 at http://www.eiu.com

- Total of France, company site, press releases, accessible at http://www.total.com/en/press/press_releases, accessed on 20/09/06

o [TOTa], /pr_2004/040920_Congo_5427.htm o [TOTb] /pr_2006/060725-congo-moho-bilondo-permit_10117.htm

- [WN00] World News, Energy Profile of Congo, accessed on 20/09/06 at http://www.wn.com/s/congopower/

- [MP] Maurel and Prom company site, http://www.maureletprom.com/5_locate/, accessed on 20/09/06

- [CIN] Communication Nationale Initiale, République du Congo, FONDS POUR L’ENVIRONNEMENT MONDIAL, Projet PRC 98 / G31, September 2004

- [REN21] http://www.ren21.net/iap/commitment.asp?id=45, Renewable Energy Policies Network, country profile, accessed on 21/09/06

- [IZF] Listing of ministries, http://www.izf.net/izf/EE/pro/congo/2034.asp, accessed on 21/09/06

- [MBENDI] Portal on business in Africa, accessed on 21/09/06 at http://www.mbendi.co.za/

o [MBENDIa] /orgs/caet.htm, company profile of Elf Congo

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5 Annex

Figure 6 Oil fields, retrieved from [PER]

Figure 7 The onshore M'Boundi field (retrieved from the company site of Maurel et

Prom)