In 2015, the Republic of Congo’s construction market shifted from a period of high to very low activity. David Bourion, managing director of Socofran, talks about the status of future projects in Congo, the effect of low oil prices on the government and his view on how companies should react to stunted activity.
How have operators in Congo reacted to the oil price drop?
Total’s priority in 2015 was getting first oil from the Moho Nord project, and all the rest of Total’s activity has been put on standby, with the exception of projects related directly to production. Eni has done a lot of investment in its onshore M’Boundi field, but has not had success in terms of increasing production.
Eni’s Marine 12 acreage offshore is still under development, but even for this, they will pursue an approach in which they will invest only what is necessary to produce. At the moment, the projects in that field are not economic, these projects were prepared based on breaking even at USD 60-65 per barrel.
Preparation and earthworks for a new oil terminal in Djeno is one of the projects Eni still has, though it is likely the company wants to delay this project to the end of 2016. This was the strategy in June 2015, but based on the situation of July 2015 and the price of oil remaining below USD 60 per barrel, I am not sure that they will continue this investment. Perhaps they will just reduce the scope.
Has this situation affected the relationship between the public and private sectors in Congo?
The public sector has also been affected by this crisis. The government has always been a challenging client, but now it is facing difficulties in paying contractors. It invested a lot of money in the African Games, which took place in September 2015 in Brazzaville.
As a result, since 2013 the government has a serious debt to many companies. This issue is not helped by the fact that state revenues are going down because of the oil price falling.
For more news and features on Republic of Congo, click here.
TOGY talks to Sylvain Itté, French Ambassador to Angola, about the strong economic and cultural ties between the two countries,… Read More
TOGY talks to Li Patrik, director of energy, environment, infrastructure at the China-Britain Business Council (CBBC), about the difficulties of… Read More
TOGY talks to Río Negro province Secretary of Hydrocarbons Sebastian Caldiero about policies implemented by the provincial government to manage… Read More
TOGY talks to Heba Filobbos, area manager of the Northern Gulf for Halliburton, about the company’s experience working as an… Read More
TOGY talks to Christopher Gunson, partner at Amereller, about the oil and gas industry in the UAE and the surrounding… Read More
TOGY talks to Graeme Taylor, Vice President for Angola at Halliburton, about forecasted stabilisation, onshore potential and the qualities required… Read More
This website uses cookies.