Fast Market Research recommends "Congo Oil & Gas Report Q2 2014" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 03/31/2014 --Sub-salt discoveries, oil sands and a revamping of the regulatory framework will dominate most discussions of the petroleum sector in the Republic of Congo in 2014. As the country struggles with a steady decline in production and a lag of new replacement projects in the near term, the government is sending strong signals that it realises measures have to be taken to reverse the trend by modernising the regulatory system, cooperating with its neighbour Angola and standing firm on its commitment to what could be the first bitumen oil sands development on the African continent. While the prospects for a spike in production are quite limited in the 2014-2015 window, the extension of the Moho-Bilando deepwater field will bring new production on-stream in two phases in 2015 and 2016. We are factoring this new crude into the country's production outlook for 2016-2017. It will help make up for premature depletion of the Murphy Oil-led Azurite offshore field. The company announced in 2013 that it could release the FPSO before the contract expires in 2016. A late 2013 crude discovery by CNOOC and its partner ORYX on the Haute Mer offshore block was scheduled to undergo testing in early 2014 as part of a multi-well drilling and testing programme, according to ORYX, the junior partner.

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Strong government support for the sector, reflected in aggressive investment attraction campaigns accompanied by soothing words that any regulatory changes will add to the investment attractiveness of the country rather than swing to nationalist tendencies, should reassure current operators. Some clarity on the trendline should be evident in 2014 with an expected a new licensing round of 10 blocks, both offshore and onshore as well as more detail on any regulatory modernisation. However, there is a question mark over whether it will be enough to attract new entrants or merely entrench the dominance of Total and Eni.

The main trends and developments for the RoC's oil and gas sector are:

- Our forecasts suggest at least a temporary reversal in the decline of crude production starting in 2016 and 2017 before returning to a modest downward slope. The projection is based upon natural decline of mature fields, the announced wind down of the Azurite project, and the onset of new production from new stages of the Moho-Bilando field. Production has steadily fallen from a 2010 peak of 312,000 barrels per day (b/d) to 283,600b/d in 2013. We expect an uptick, peaking in 2016 at 398,900b/d, before returning to an annual rate of decline of 1% through 2023. However, the Eni-led discovery of 600mn barrels (bbl) of oil and 2bn cubic feet of gas from the Mariner XII block could add to shorter-term upscale risk if the discovery is commercially feasible, as the company hopes to ascertain in 2014.

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