"Africa is, indeed, coming into fashion." - Horace Walpole (1774)

4.01.2010

the congo's oil

File this under, "Things I'll believe when I see them:"
Democratic Republic of Congo hopes to make its oil sector more attractive to foreign energy firms by offering competitive contracts and speeding the process for awarding blocks, according to energy ministry recommendations seen by Reuters...

"These resources should be realised so that they really benefit the country and its people," the ministry said in the recommendations. "To do this while ensuring the interest of the nation, the law that governs this sector should contain provisions to attract investors," it said.

Congo's tiny oil sector pumps about 25,000 barrels a day and development has been virtually paralyzed by decades of corruption and conflict.

...The energy ministry's proposals for the new oil code would allow producer companies to claim up to 60 percent of any eventual oil output after royalties to cover their costs, which are typically high during early field development.

That percentage would rise to 70 percent for reserves deemed difficult to reach, including those in very remote zones, in deep water, or swampy areas, according to the recommendations.

The state would then take no less than 40 percent of the remaining output, dubbed "profit oil", according to the recommendations.
The odds that the DRC - which, let's remember, has barely-functioning political institutions, a culture of entrenched corruption, and politicians who make little distinction between the public coffers and their private bank accounts - can pull this off such that it actually benefits the Congolese people seem mighty slim to me. Then again, stranger things have happened. Thoughts?

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