Republic of Congo to supplement dwindling oil revenues with gas earnings

GMT 03:22 2016 Tuesday ,17 May

Arab Today, arab today Republic of Congo to supplement dwindling oil revenues with gas earnings

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Due to the drop in oil prices which has negatively affected the state budget and paralysed various economic sectors, the Republic of Congo government is trying all means to stabilize the economy.

Even though the key word for several years has been diversification of the national economy, results obtained so far in efforts to develop key sectors such as mining, agriculture, agribusiness, industry, telecommunication and tourism are still unsatisfactory.

The Congolese government has now turned to development of the natural gas sector by banning gas flaring within the petroleum sector.

Gas flaring is a practice that is common in oil drilling in the Republic of Congo. It consists of burning natural gas that is associated with crude oil when it is pumped up from the ground.

Exploitation of gas which is found in smaller quantities than oil had become very expensive for petroleum companies.

"Preservation and monetization of natural gas resources could help to reduce negative effects of reduced oil prices on the Congolese state budget," Prime Minister Clement Mouamba said on May 12 while releasing results of a study on "How natural gas could help the Republic of Congo diversify its economy."

According to the British expert Mott Macdonald who carried out the study, it is essential to put in place necessary legal frameworks to guide operators in the sector, so that natural gas resources could contribute to the country's economy.

The study further showed that methanol from the natural gas could also be used in industrial production of other products such as paints, cement, ink and plastics.

Since 2012, the Republic of Congo joined the Global Gas Flaring Reduction Initiative, in partnership with the World Bank.

"The initiative requires countries to progressively reduce gas flaring to reach zero levels by 2030," Republic of Congo's Petroleum Minister Jean-Marc Thystere Tchicaya said.

Since then, the country has made progress towards reducing gas flaring, but has not monetized the natural gas sector.

According to Republic of Congo's petroleum ministry, the country has managed to reduce gas flaring from 34 percent in 2008 to 16 percent in 2015 at all oil drilling sites.

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