Congo expands oil auction round after western crude production surge

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The Democratic Republic of Congo has expanded a contentious cycle of oil licenses in what the hydrocarbons minister described as a response to calls for increased crude production from Western governments after the war in Ukraine.

Didier Budimbu told the Financial Times that Congo had “no choice” but to increase the number of oil exploration blocks it will auction next week from 16 to 27, after the president American Joe Biden visited Saudi Arabia to urge the kingdom to pump more oil, and the EU had reopened mothballed coal-fired power plants.

“We have the right to take advantage of our natural wealth,” the hydrocarbons minister said, arguing that revenues from the sale of the blocks could be used to build new schools, highways and hospitals. “We are a free and sovereign nation, so we will exploit it.”

Congo, home to 92 million people, currently produces around 25,000 barrels of crude oil a day from a small number of onshore and offshore blocks along its Atlantic coast. The government has long harbored ambitions to produce oil in other parts of the country’s vast interior, but environmental concerns, corruption and a lack of export options have dampened exploration activities.

The 11 blocks that have been added to the planned auction include two areas that overlap Virunga National Park, a protected area on the eastern edge of the vast central African country, Budimbu said in an interview.

Soco International and Dominion Petroleum pulled out of oil exploration in Virunga – home to some of the world’s last mountain gorillas – after a global backlash in 2014 spurred in part by exposure in a Netflix documentary.

“A few years ago people got their noses in there, we saw actors like Ben Affleck and Leonardo di Caprio get on their high horses and ask for the project to be stopped,” Budimbu said, referring to the actors who have campaigned for the protection of Virunga. “This time we won’t stop.”

The blocks up for auction also include parts of Cuvette Centrale, an area described by campaigners as a “carbon time bomb” due to the large amounts of carbon dioxide that could be released if its wet peatlands are disturbed. The biodiversity hotspot contains around 30 gigatonnes of carbon, according to the UN, which is equivalent to around one year of global annual emissions.

Environmental groups have already called on the government to cancel the tender, first announced last year, over the potential for drilling to destroy peatlands and other protected areas.

Irene Wabiwa, international project manager for Congo’s forest campaign at Greenpeace Africa, said the oil auction undermined Congolese President Felix Tshisekedi’s bid to position the nation as “a solution country to the climate crisis”.

Tshisekedi wrote in the Financial Times last year that climate change could wipe out up to 13% of Africa’s gross domestic product and argued that the continent should be compensated for protecting its carbon sinks.

Budimbu said the potential reserves covered by the auction could be worth up to $1 billion at current oil prices, although there is no guarantee that any of the blocks will be developed and Congo will not. will likely draw only a small fraction of that amount from the bid.

French TotalEnergies, Italy’s Eni and US oil major ExxonMobil are among the energy companies to have expressed interest in the tender over the past year, the minister added.

In response to requests for comment, both Total and Eni said they had no intention of participating in the licensing round. Exxon declined to comment, although it has no track record in Congo and participating in the tender would be an unusual step.

Total is developing an oil project in Uganda on Lake Albert, located along the eastern border of Congo. In February, the French oil major made the final investment decision to develop the oil field and a disputed 1,443 km pipeline to export the crude via Tanzania. At least 15 banks and seven insurers (and reinsurers) said they would not fund the project for climate reasons.

Additional reporting by Andres Schipani in Nairobi

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