The Ministry of Hydrocarbons for the Republic of the Congo on Friday announced that the country has become a member of the Organization for Petroleum Exporting Countries (OPEC). The country’s membership, which was concluded on Friday June 22 during the 174th Ordinary Meeting of OPEC, makes it the fifteenth member of the organization. This also comes five months after the government of Congo said that it wanted to join OPEC.
“The Republic of the Congo is thrilled and honored to be joining OPEC and to do our part to preserve an equilibrium in global oil markets and ensuring a sufficient flow of investments into hydrocarbons,” said Jean-Marc Thystère-Tchicaya, the Minister of Hydrocarbons.
Congo’s oil accounts for about 75 percent of government revenue and 90 percent of export earnings. Congo was also among the countries hit the hardest by the global dip in prices and a slowdown in its own output since 2014. This caused the 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. However, the country is currently working on new projects that are expected to boost the output of the country by a quarter to 350,000 barrels per day (bpd) this year.
It is reported that the Republic of Congo’s entry into OPEC was backed by the United Arab Emirates (UAE) and Saudi Arabia, after President Denis Sassou Nguesso changed its alliance from Qatar. It would be recalled that in 2017, Saudi Arabia, the UAE, Bahrain and Egypt cut trade and diplomatic ties with Qatar after accusing the emirate of supporting terrorism and meddling in their affairs. Qatar still denies this charges till date.
There is no way you can talk about Congo’s membership into OPEC without mentioning its influence. In 2017, the Republic of the Congo was among the 11 non-member countries that joined OPEC in the historic production cuts of 1.8 million barrels of oil per day. This declaration of cooperation was widely regarded as a success because it helped restore the vitality of global oil markets and Brent oil prices to reach their highest level this year since 2014.
What does the membership mean for Congo
Becoming a member of OPEC gives the Republic of the Congo a voice in a powerful oil organization. It presents an opportunity to liberalise the country’s oil industry and signals a reorientation of its diplomatic relations in the Middle East.
This admission will help the Republic of Congo, the fourth largest producer of oil in sub-Saharan Africa to establish itself in the definition of policies and decision-making within the sector. It will also help Congo to better liberalise the sector and help bring in new players into the country as it opens the door for new investments into both its down and upstream oil sectors.