Reappointed for a second term as head of the National Petroleum Company of Congo (SNPC), Maixent Raoul Ominga discusses the company’s priorities. Maintenance.
How will you present the SNPC?
The National Petroleum Company of Congo (SNPC) is a state-owned oil company founded in 1998 with the fundamental mission of contributing to the development and effective management of Congolese oil heritage, to explore, exploit and distribute Congo’s hydrocarbons. through balanced partnerships. Today, the company generates most of the country’s export earnings and contributes more than 70% of its budget, thus making SNPC the engine of value creation and development in the country. It is also a major source that allows the financing of the programs contained in the new National Development Plan 2022-2026. Through its subsidiary, the Coraf refinery, SNPC provides between 60 to 70% of the country’s needs in refined petroleum products. Similarly, the SNPC is, among other things, the manager of the State mandate for the supply of petroleum products to the Congo. Being a public body, we apply state policy, particularly in terms of oil subsidies at the pump in order to protect the purchasing power of the Congolese. The SNPC must constantly find a solution to compensate for the enormous financial losses faced on the one hand with soaring prices and, on the other hand, with the blocking of prices at the pump decided by the government.
The SNPC not only embodies the country’s energy policy, but it is also a strong vector of growth and development.
You have just been reappointed for a second term at the head of the company. Are these the same priorities as those that prevailed when you arrived in 2018?
When I arrived in 2018, the mission was above all to restructure the SNPC. We have redefined roles and remobilized human resources around clear strategic objectives which consist for the State of Congo in better controlling its resources and developing them. That being said, in a context of crisis and in view of the actions carried out over the past four years in the various sectors of activity of the SNPC, and which have made it possible to lay a solid foundation for its growth, we can in all modesty to say that the balance sheet is relatively satisfactory.
The pandemic since then and the Ukrainian crisis have brought their share of challenges and we must say that SNPC has been able to adapt to this difficult situation marked since March 2020 by a shock in global demand and, since February, by a spectacular surge. oil prices. Last March, in response to sanctions on Russian oil exports, gasoline/diesel prices reached a record high of $1,525 per tonne.
Beyond the eminent management of the country’s supply of petroleum products at prices set by the State, we are also working on new projects such as the Pointe-Noire-Brazzaville-Oyo-Ouesso oil pipeline which will improve significantly the network of the country in terms of access to energy. Upstream, we are working to increase oil production by carrying out additional studies on the assets operated to better develop them, in particular through technical and financial partnerships.
By way of illustration, the potential reassessment studies, carried out over the period from 2018 to 2019 on the MKB II Permit, highlighted significant potential characterized by the identification of new areas of interest, the increase in reserves and a better knowledge of the deposit and therefore to improve the recovery factor.
SNPC has also taken stakes and ensures the operating of mature permits such as the onshore ZINGALI and LOUFIKA TIONI permits which it has been operating since July 2020, through its subsidiary SONAREP, and the offshore LOANGO II and ZATCHI II permits for which it operates. operating since January 2022. The company’s portfolio has also expanded with equity investments in the EMERAUDE II and KOMBI LIKALALA II operating permits.
All these new permits enrich SNPC’s portfolio of assets and are already contributing to an increase in its production. SNPC intends to continue this momentum by signing new production sharing contracts.
Through the Performance 2025 program, for the years 2022-2025, we plan to accelerate the transformation of SNPC by improving its performance in all areas of its activities.
This program is based on 4 main pillars that we have set ourselves, namely: increasing our revenues, controlling our costs, contributing to government action and modernizing our internal practices and activities.
What about gas production?
In order to better exploit its gas resources, Congo has drawn up a Gas Master Plan. Congo has promulgated a new gas master plan by the Ministry of Hydrocarbons to explore, among other things, recoverable gas by eliminating harmful flaring practices that generate greenhouse gases. It was drawn up in collaboration with the firm Wood Mackenzie, the main conclusions of which were as follows: the existence of a gas potential is significant; the need for the establishment of a dedicated regulatory framework as well as the identification of the possibility of gas recovery.
This plan makes it possible to optimize the use of the country’s natural gas resources. The objective is to drain this resource towards the production of fertilizers, petrochemicals or energy.
What is SNPC’s position in the energy transition?
From the outset, let’s say for the success of the transition to an energy model that meets the criteria of sustainable development, all energy sources are necessary to meet global energy demand.
The development of natural gas upgrading projects is one of the steps towards the energy transition. Indeed, these projects would reduce the impact of fossil fuels on the environment.
The Congo is not on the sidelines of the current global trend which favors clean energies and has therefore decided to give a more important place to natural gas in its energy mix. SNPC is positioned at the forefront of the global energy transition through the promotion of projects that develop cleaner gas resources, including the exploration and development of hydrogen in the Congolese interior basin, the construction of mini hydroelectric dams and investment in off-grid solar in remote communities.
The SNPC and the Congolese State, aware of the importance of a better framework for gas, are working on the development of a new gas code.
Recent studies that we have carried out on the inner basin of the Congolese basin have highlighted indices of natural hydrogen resources, known as “white hydrogen”. It should be noted that natural hydrogen represents a significant potential for reducing greenhouse gases as well as a significant economic windfall. SNPC is currently working with some international companies to assess its potential for development.
What is your analysis of the recent creation of the African Energy Transition Bank?
We welcome this initiative by the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organization (APPO) to create an African Energy Transition Bank. African oil companies are facing a double challenge with, on the one hand, a disinvestment announced by the major financial institutions in fossil fuels and, on the other hand, the need to operate an energy transition and reduce their carbon footprints. . This transition phase has costs but also opportunities. We hope that other financial institutions will join Afreximbank so that the African Energy Transition Bank has sufficient resources to support the sector in its transformation and in the development of its resources.
The Ukrainian crisis weighs on the world economy by revealing problems of energy independence. Africa is also facing a climate emergency. This context could boost and accelerate the deployment of clean energy within countries. But the producing countries count on oil and gas investments to ensure economic growth and the improvement of the quality of life of the populations. It is therefore difficult to find the right balance. This bank will make it possible to establish models of South-South cooperation (solutions found internally and without relying on foreign funding) and guarantees an efficient allocation of resources: It will allow African member countries to have easier access to development and to effectively support the energy transition.
What are your expectations and perspectives on COP 27?
We are participating in this great event as a representative of the Congo Basin, one of the lungs of the planet, with a fragile ecosystem to protect and a balance between exploration activities and the preservation of fauna and flora. The challenge of preserving this vital space goes beyond the borders of the Congo; it is African and global. Hence our support for the initiative of the Blue Fund for the Congo Basin, an initiative launched by President Denis Sassou Nguesso during COP 22 and which has seen the signature of more than ten countries. We hope that COP 27 will be the COP for energy transition solutions and financing in Africa and particularly in the Congo Basin.
Congo’s debt to private traders has often been mentioned in recent years? How to overcome this problem?
I must announce to you that this question is now behind us. Congo has signed debt restructuring agreements with Trafigura and Glencore. Better still, we are now positioning ourselves on the downstream oil market with a trading company (SNPC Trading Pte Ltd) based in Singapore and operating in accordance with international standards thanks to the contribution of our well-trained executives in London and on other financial markets. . SNPC now intends to position itself across the entire oil value chain. And that’s just the beginning.