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Brazzaville, Republic of the Congo

Republic of the Congo: Oil revenue projections

An analysis of oil revenue trends and fiscal policies to inform public debate and reforms in the Republic of the Congo.

Context

The extractive industries are a cornerstone of the Republic of the Congo’s economy, generating over half of total government revenues. As one of Africa’s largest oil producers, the country has long faced public demands for greater transparency in managing its oil wealth.

EITI reporting in the Republic of the Congo has become a key source of valuable data. Since 2013, the country has published oil production data for all licenses, and by 2016, it began disclosing individual oil sales data and project costs for each license. Additionally, the Republic of the Congo publishes all its oil contracts in full.

A 2021 study, commissioned by ITIE Congo and undertaken by R4D, used EITI data to analyse past and future payments from key oil projects and companies’ oil sales. The analysis examines past and future revenues for four major projects using different price scenarios and accounting for the main parameters that influence the state’s share of revenues. 

What the data shows

Government oil revenues are projected to shrink

The study found that, due to changes in the fiscal terms, government revenues from these four licenses are not expected to return to 2013 and 2014 levels, even under a high price scenario. Between 2013 and 2019, oil prices fell from a high of around USD 100 per barrel to a low of around USD 40 per barrel. In the same period, however, production doubled and annual project revenues increased by about USD 1 billion per year. Yet annual revenues to the government decreased by more than USD 1 billion per year.  

 

Even if production growth compensated for declining oil prices, the study found that the government earned less due to its shrinking share of project revenues, which was scaled down from around 60% in 2013 to less than 30% in 2019. This decrease is attributable to renegotiations of terms in the oil contract related to what is called the “high price” instrument. This has seen an increase in the share of revenues going to the companies for their costs.  

The analysis also benchmarked oil sales, costs and prices, providing insights into the fiscal regime's effectiveness. These findings offer valuable lessons for policymakers and stakeholders, helping to inform public debate and potential reforms to ensure sustainable management of Congo’s oil wealth.

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Data sources

This data use case is drawn from a study undertaken by Resources for Development Consulting (R4D).