The government will seek to strike “more multilateral deals” and generate diverse sources of funding as the country’s economy goes through “a crucial moment,”
The Republic of Congo’s admission into OPEC presents an opportunity to liberalize the country’s oil industry and signals a reorientation of its diplomatic relations in the Middle East, Communications Minister Thierry Moungalla said.
The announcement Friday that it joined the cartel bolsters plans by sub-Saharan Africa’s fourth-biggest crude-reserves holder to increase production by at least a fifth to 350,000 barrels per day. The Central African nation’s government derives most of its revenue from the oil industry, which has been dominated by France’s Total SA and Eni SpA of Italy, Moungalla said.
“They have been controlling the oil sector in our country for way too long and this admission will help us to better liberalize the sector and bring in new players willing to invest even in marginal fields,” he said by phone Saturday from the capital, Brazzaville. “Eni and Total are and will remain our historic partners, make no mistake, but with OPEC, the doors are now open for new investments into our down and upstream oil sectors.”
The government will seek to strike “more multilateral deals” and generate diverse sources of funding as the country’s economy goes through “a crucial moment,” Moungalla said. A drop in oil prices that began in 2014 caused Congo’s economy to shrink 4.6 percent last year, the second successive annual contraction and the largest since 1994, according to International Monetary Fund data. It may grow an anemic 0.7 percent in 2018.
Congo’s entry into OPEC was backed by the United Arab Emirates and Saudi Arabia, after President Denis Sassou Nguesso switched his government’s previous alliance away from Qatar, Moungalla said.
“We used to have an excellent relationship with Qatar,” he said. “The president decided that the United Arab Emirates and Saudi Arabia axis was the best and it has paid off with our admission. Our relationship with Qatar is over, but we are not enemies.”
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut trade and diplomatic ties with Qatar last year after accusing the emirate of supporting terrorism and meddling in their affairs, charges it denies.