January 17, 2018 / 5:57 PM / a month ago

Congo Republic plans to join OPEC oil cartel

BRAZZAVILLE (Reuters) - Congo Republic plans to join the OPEC oil cartel, the government said, as the former French colony presses ahead with projects that could help it become the third-largest oil producer in sub-Saharan Africa.

“The Republic of Congo has decided to accede to the Organization of the Petroleum Exporting Countries (OPEC),” the statement dated Jan. 11 but sent out to journalists on Wednesday.

Congo’s oil sector was badly hurt by the global dip in prices and a slowdown in its own output since 2014, but it has been rejuvenated by new projects scheduled to boost output by a quarter to 350,000 barrels per day (bpd) this year.

If successful, the country, where Italy’s ENI (ENI.MI) and France’s Total (TOTF.PA) are among the operators, will be the no. 3 oil producer in sub-Saharan Africa, analysts say.

“This imminent accession expresses the will of his Excellency (Congo President) Denis Sassou Nguesso to place our country in the rank of the world’s leaders,” the statement, signed by Nguesso’s director of cabinet Florent Ntsiba, added.

He said Saudi Arabia’s Foreign Minister Adel al-Jubeir had expressed support for the idea during a visit to Brazzaville on Jan. 8.

    But sticking to strict OPEC quotas could prove tough for a central African country that is in major financial trouble and which depends almost exclusively on oil for its foreign exchange and government revenues.

    The economy has been badly hit by low oil prices and poor fiscal management, causing total government revenue to fall by nearly a third since 2015 and public or publicly-guaranteed debt to rise to around 110 percent of GDP.

    At the end of December, the government said it planned to cut spending next year by 8.6 percent to 1.38 trillion CFA francs ($2.5 billion), following a steep 45 percent cut to the 2017 budget this month, as it seeks to negotiate an IMF bailout.

    Reporting by Christian Elion; Writing by Tim Cocks; Editing by David Goodman and David Evans

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