Report Prompts Further Concerns about Congolese Oil Company
Sub-Saharan Africa’s third largest oil producer, the Republic of the Congo’s state-owned oil company, Société nationale des pétroles du Congo (SNPC) is carrying billions of dollars in debt, according to a Global Witness report released on Monday.
The report made use of what it says are previously unreviewed accounts and oil contracts that were made public on the Congolese government’s website at the insistence of the IMF, which required the government to open SNPC finances if it wished to receive its fourth multimillion dollar bailout from the organization. This was provided to the company last summer.
Documents show that SNPC is facing US$3.3 billion in oil-backed liabilities. Such a debt could ultimately balloon the total national debt to nearly $13 billion, a number that Global Witness claims was underreported in a recent IMF country study.
A substantial majority of the Congo’s revenue comes from oil. SNPC is, therefore, described in the report as a company that is “too big to fail”, which raises the concern that much of the SNPC debt could ultimately be restructured to fall on the government itself.
Most of SNPC’s oil-backed liabilities, $2.7 billion, is owed to international oil companies such as Eni, Total and Chevron, which have led to questions as to why the state-owned oil company left itself so vulnerable to foreign corporations.
The report does not answer how, precisely, these companies were able to secure the contracts that left the SNPC exposed to such overwhelming debt in the first place.
Within these deals, international oil companies can also charge SNPC for costs related to their own employees salary and pension contributions, along with their medical, transport, telephone, accommodation, and children’s school fees.
Natasha White, the journalist who produced the Global Witness report, clarified to the OCCRP that while these contracts are legal, “we still find them to be highly questionable, particularly within the context of who signed these contracts and why.”
While transparency is a good first step, the report concludes: “transparency is not an end in itself, and the files raise more questions than they answer.”
In a country that has been described as one of the most unequal in the world, where many citizens have already gone years without pension payments, this report sounds the alarm on a company it refers to as “a notorious black box”.
SNPC has been embroiled in a number of corruption scandals, including one OCCRP reported on in September of 2018, which involved a bribery scheme between Swedish billionaire Torbjorn Tornqvist and the Congolese president, Denis Sassou-Nguesso, who has ruled the country for nearly 40 years.