Congo first produced oil in 1957 from the onshore Pointe Indienne field, which reached its peak output of around 2,500 barrels per day (b/d) in the mid-1960s. Congo's total oil production then rose after offshore oil deposits were discovered in 1972. The offshore Emeraude field, in particular, added 50,000 b/d to the country's oil production in 1974. While output at Emeraude had fallen to roughly 9,000 b/d in 1994, the field still contains several hundred million barrels of heavy, 22° API oil which is uneconomical to produce. Other offshore fields were developed subsequently by France's Elf Aquitaine and Italy's Agip. These fields included Loango in 1977 and Likouala in 1980 as well as Sendji and Yanga in the early 1980s. By 1987, oil production reached 125,000 b/d, with about half of this output coming from the Sendji and Yanga fields. In the late 1980s, the Tchibouela and Zatchi fields came online and are now Congo's two largest producing fields, with respective 1994 outputs of 47,000 b/d and 31,500 b/d.

In 1995, Congo produced about 175,000 b/d, down slightly from 180,000 b/d in 1994. Oil production is expected to rise to around 260,000 b/d by 1998 after Elf's N'Kossa and Agip's Kitina fields come online. In 1994, Congo introduced a new hydrocarbon law offering production sharing agreements (PSAs) to foreign oil companies. These PSAs were designed to replace the previous joint venture arrangements which had been in existence since 1968. The regime change eliminated the government's need to contribute to field development costs. As of December 1995, Congo had borrowed about $520 million from Elf and Agip for contributions to its share of the N'Kossa and Kitina development costs. This capital will be repaid from the government's future oil revenues. In 1995, foreign companies also were given the option of converting existing exploration and production joint venture contracts to PSAs. In November 1995, both Elf and Agip signed PSAs for their N'Kossa and Kitina field developments, respectively. The PSAs reduced the tax on produced oil from 17.5 percent to 12 percent and introduced a profit oil split in which the state will take 31 percent of production. As part of their PSA agreements, Elf and Agip will provide one percent of their annual revenue to an "investment fund" to finance development projects by small and medium companies in rural communities. This fund is similar in nature to Gabon's Provision pour Investissements Diversifies (PID).

In March 1995, the Congolese Parliament ratified Hydro-Congo's proposed sale of its stakes in Elf Congo (25%) and Agip Recherches Congo (20%). In March 1995, Elf bought the government's stake in the former joint venture for $50 million. Agip followed suit and obtained full ownership of Agip Recherches Congo in January 1996.

Most exploration activity in Congo, as in other West African oil producing countries, is focusing on deepwater offshore areas. Twenty-six exploration, appraisal, and development wells were drilled in 1995, down from 30 in 1994. Six of these were exploration wells, up from two in 1994 and four in 1993. The most successful was Chevron's and Elf's Moho Marine One discovery located 47 miles offshore in the Haute Mer concession. In late 1995, a drilling effort in 2,600 feet of water resulted in a flow rate of 5,700 b/d. The Moho well is thought to have led to a find of an estimated 300 million barrels of 38° to 42° API crude oil reserves. Subsequent appraisal could raise this reserve estimate, possibly to as high as 1 billion barrels. In other developments, Occidental acquired the Marine XI and XII blocks in PSAs with Hydro-Congo in October 1995. Occidental has 85 percent interest in the blocks, which are in shallow waters of less than 300 feet. Marine XI and XII contain non-commercial discoveries made by Elf, Agip, and Conoco in the 1980s. The blocks subsequently were relinquished by those companies. In mid-1995, Exxon acquired rights to explore the deepwater Mer Profunde I permit area. Exxon also obtained a 15 percent stake in the Marine IX block, which is operated by Shell. Water depths in these two areas range between 600 to 6,500 feet.

Elf is the largest foreign operator in Congo, with roughly 100,000 b/d of output from the Tchibouela, Sendji, Tchendo, Yanga, Likouala, Emeraude, and Pointe Indienne fields. In addition, Elf's N'Kossa field is the largest oil development project underway in Congo. Located in the Haute Mer permit area, the N'Kossa field holds estimated reserves of between 440 to 600 million barrels of light, almost sulphur free, 44-45° API oil. The N'Kossa field is located about 40 miles offshore in water depths of between 600 to 1,000 feet and is the deepest offshore development in the Gulf of Guinea. Elf (51%), Chevron (30%), Hydro-Congo (15%), and South Africa's Engen (4%) are undertaking the $1.77-billion field development, which is expected to begin production of 50,000 b/d in April 1996. Peak production is projected at 120,000 b/d with an anticipated field life of 30 years. Elf predicts that it ultimately will be able to recover 47 percent of the field's reserves. The use of a single concrete barge is a unique aspect of the N'Kossa project and could result in a 60 percent reduction in field development costs. Eventually, development also will include 24 production and 12 water re-injection wells based from two unmanned steel production platforms located 1.7 miles apart. About 1,400 tons per day of liquefied petroleum gas will be produced in addition to oil.

In 1995, Agip produced about 65,000 b/d from its Zatchi and Loango fields. Agip (37.75%), Hydro-Congo (35%), and Chevron (29.25%) currently are developing the Kitina field located in the Marine VII permit area. Kitina was discovered in 1991 and contains an estimated 100 million barrels of reserves. The field is expected to come online in 1997, with a peak production of 55,000 b/d two years later. Agip and Chevron also are appraising the nearby Kitina South discovery made in 1992 and are conducting other exploration activities in the Marine VII area.

In mid-1994, U.S. independents Nuevo and Nomeco acquired Amoco's stake (43.75%) in the offshore Yombo field. Nuevo (43.75%), Nomeco (43.75) and Kufpec (12.5%) are conducting development drilling in the 34 million barrel Yombo field. In February 1996, two new development wells were completed at the field, bringing total field production to 15,000 b/d. Up to 12 more wells may be drilled at the field.

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