By Prince Kurupati
On 22 June 2018, the Democratic Republic of Congo became the 15th member of the Organization of the Petroleum Exporting Countries (OPEC). OPEC is a grouping of oil-producing countries and it has major influences on the pricing of oil and its related products world over.
The Democratic Republic of Congo had for a long time been considering joining OPEC. Earlier on this year when Equatorial Guinea joined OPEC, the country’s energy minister Gabriel Mbaga Obiang Lima said that his country and three others (Democratic Republic of Congo, Chad and Malaysia) had decided to join OPEC after assessing the power of the organisation not only in influencing global oil prices but also in helping member states to maximise their profits from exporting oil.
The news about Congo joining OPEC came out soon after the end of the 174th Ordinary Meeting of OPEC.
The Minister of Hydrocarbons H.E. Jean-Marc Thystère-Tchicaya in the Democratic Republic of Congo announced the news in Congo stating that “The Republic of the Congo is thrilled and honoured to be joining OPEC and to do our part to preserve an equilibrium in global oil markets and ensuring a sufficient flow of investments into hydrocarbons.” He went on to state that “Severe oil market downturns like the one the world experienced recently remind us of the essential role that institutions like OPEC in ensuring stability. We are proud to cooperate with the world’s oil leaders.”
Industry analysts said that the news on Congo joining OPEC does not come as a surprise if one considers the recent developments. Late last year, OPEC called on all member states and also other non-member states but oil producing countries to limit production so as to stabilise prices by preserving an equilibrium in global oil markets in the so-called Declaration of Cooperation. Congo and 10 other non-member states took heed of OPEC’s call and cut their production by as much as 1.8 million barrels of oil per day till the end of the year.
Taking a cue from this, industry analysts say it was just a matter of time before the Congo and the other 10 states joined OPEC as they were facing the same threats from ever rising volatility in oil prices.
The Declaration of Cooperation was a huge success in restoring the vitality of global oil markets and Brent oil prices reaching their highest level this year since 2014.
H.E. Jean-Marc Thystère-Tchicaya said that Congo wants to increase its oil production starting this month by 25%. This means that Congo will now start producing 350,000 barrels a day. If Congo manages to produce 350,000 barrels a day as it promises, it will rise to become the third largest producer of oil in sub-Saharan Africa.
Before Congo’s membership was confirmed by the 174th Ordinary Meeting of OPEC, Equatorial Guinea had been the latest African addition to OPEC having joined in May 2017 following in the footsteps of Gabon which had joined OPEC in 2016. As it stands, Chad is the only African country that supported the Declaration of Cooperation that is yet to join OPEC. Of the current 15 member states of OPEC, Africa is represented by seven countries.
Despite Africa now dominating in terms of member states, industry analysts believe that Saudi Arabia and Russia are still the ‘big boys’ in the organisation and it is these two countries that will propose any major decisions to be taken by all other member states. Be that as it may, Congo will still benefit immensely from OPEC.