Oil and gas discoveries in the east of the country give the DRC the second largest crude oil reserves in Central and Southern Africa. These reserves are primarily located in the four major lakes bordering Tanzania, Burundi, Rwanda, and Uganda. The DRC has proven reserves of 180 million barrels, though estimates of total petroleum reserves exceed 5 billion barrels. Currently, Congolese oil production is limited to the Coast Basin, yielding 25,000 barrels per day of offshore production, all of which are exported.
Along with large recently identified oil fields, the DRC may hold as many as 30 billion cubic meters of methane and natural gas in the three major petroleum deposits. Lake Kivu, bordering Rwanda and Burundi, has nearly 60 billion cubic meters of dissolved methane in its waters. Beyond the estimated 60 billion cubic meters of methane in Lake Kivu, the lake generates as much as 250,000 cubic meters of methane annually.
The DRC contains three sedimentary basins:
The Coastal Basin located in Kongo Central and extends offshore to the Congo River estuary,
The Central Basin, and
The Grabens Albertine and Tanganyika, which extends from the Ugandan-DRC border to the southern tip of Lake Tanganyika on the Zambian-DRC border.
Potential
6% of African oil stock, notably:
Costal basin (5992 km2, Province of Kongo Central);
The sedimentary basin of the central basin (800,000Km2) with 32 blocks that are not yet allocated;
The basin of the western branch of East Africa Rift;
The Albertine Graben (5 blocks, 1 open for exploration);
The Tanganyika Graben (11 blocks);
Lake Kivu (open for exploration of methane gas);
Lake Upemba.
Refined petroleum products, including gasoline, aviation fuel, kerosene;
Petroleum based lubricants;
Oil refining operations;
Biofuels production.
Certification of oil and gas reserves;
Prospection and exploration of sedimentary basins;
Exploitation of Lake Kivu methane gas;
Construction of a pipeline crossing the basin;
Construction of storage facilities;
Construction of a refinery;
Production of road bitumen in Kongo Central Province;
Storage, transportation and Pipelines.
Legal Framework
The DRC oil and gas sector was until recently governed by Ordinance-Law No. 81-013 establishing general legislation on mines and hydrocarbons, as modified by Ordinance-Law n°82-039 dated 5 November 1982 and Law n°86-008 dated 27 December 1986 (the Mines and Hydrocarbons Law). However, since 2002, the mining sector has been governed by a separate mining code, which rendered many provisions of the Mining and Hydrocarbons Law obsolete.
After several years of deliberations on the reform of oil and gas legislation, the DRC adopted Law n°15/012 dated 1 August 2015 establishing a general regime for hydrocarbons (the Hydrocarbons Law). The legislative reform process was recently concluded by the adoption of Decree n°16/010 dated 19 April 2016 establishing hydrocarbons regulations (the Regulations), which, among other things, adds more details to the applicable fiscal regime. This briefing summarizes the main provisions of the new Hydrocarbons Law and Regulations relevant to oil companies engaged in upstream activities.
The Hydrocarbons Law specifies that the State owns all national hydrocarbon resources up to the point of export, but that rights to carry out petroleum exploration or exploitation operations may be granted to local or foreign legal entities selected through competitive bidding on the basis of technical and financial criteria established by the Minster of Hydrocarbons and approved by the Council of Ministers. Such rights are granted pursuant to a petroleum contract (as further discussed below). The Hydrocarbons Law no longer provides for concessions, unlike the old Mines and Hydrocarbons Law.
Foreign entities must form local subsidiaries under DRC law in order to engage in petroleum exploration or exploitation activities.
Exploration rights are valid for 3 years (or 4 years for areas with difficult geological or access conditions), renewable twice for the same period. The maximum duration of exploration rights under the Mines and Hydrocarbons Law was 8 years..
Exploitation rights are granted for a maximum period of 20 years, renewable once for a maximum of 10 years (comparable to concessions under the Mines and Hydrocarbons Law). Holders must commence work within 12 months after the approval of the development and production plan.
It is noteworthy that under the Hydrocarbons Law, the State-owned oil company (presumably COHYDRO (Congolaise des Hydrocarbures) created by Decree-Law n°245 dated 9 August 1999) is entitled to a 20% minimum stake in upstream petroleum activities pursuant to an association contract to be entered into with third parties (which does not create a separate legal entity).