Angola--DRC sink border dispute: Angola and the Democratic Republic of the Congo (DRC) have agreed to settle a boundary dispute in the lower half of the Gulf of Guinea. This could add considerably to the DRC's now meagre output.

Maritime boundary disputes in the lower half of the Gulf of Guinea continue to obstruct licensing of large areas of potentially oil rich territory. Only seven out of the 33 potential maritime boundaries in the region have actually been delimited and oil companies are naturally wary of committing large sums of money, including license fees, that could be lost if a neighbouring state makes a claim on disputed reserves. Moreover, the sovereignty of some developed oil fields has become disputed as a result of greater interest in settling maritime political boundaries throughout the world.

One of the main disputes concerns two oil producers at opposite ends of the scale. While Angolan production looks set to breach the 1m barrels a day (b/d) barrier during the course of next year, Democratic Republic of Congo (DRC) remains among the minnows of African oil production. Output from its tiny current offshore acreage is achieved via gas and water injection, while total national output stands at just 27,000 b/d a day, although even this is higher than the 7,000 b/d recorded just four years ago.

A memorandum of understanding on the dispute had already been signed and talks were held between technical experts from the two countries, even before the latest breakthrough. Then in August, Syanga Abilio, the vice president of Angolan state oil company Sonangol said: "We're sitting down together to find an area of common interest. The next move is to find out how we will can create a joint committee between both parties and see who will be the operator."

Abilio added: "It's too early to talk about reserves. So far, we only have leads that we need to turn into projects and then into prospects. After that we can estimate and talk about reserves."

He said that it was unlikely that a joint development zone (JDZ) along the lines of that devised by the governments of Nigeria and Sao Tome & Principe would be developed but declined to give further details. The conclusion of a final agreement should be aided by generally good relations between the two governments. Angola backed the current Kinshasa government during the DRC civil war.

It is difficult to assess whether the limited size of the oil industry in DRC results from a lack of oil prospects or from a lack of investment in exploration. A difficult political and investment regime during the long rule of President Mobutu was followed by several years of devastating civil war that encompassed almost all parts of the country. Overall, the low level of production is likely to be the result of a combination of both factors, with the lack of offshore acreage undoubtedly playing a role. However, the nearby states of Gabon and Congo-Brazzaville both possess sizeable onshore fields not far from the coast, with similar geology to parts of western DRC, so increased investment could yield further discoveries.

The province of Ituri in the north-east is also considered to be a good prospect for oil exploration but the province lies within one of the most troubled parts of the country. Nevertheless, Heritage Oil of Canada is currently negotiating a contract to carry out exploration work in the area, as well as on adjacent acreage across the border in Uganda.

Perenco has also been active in the country, taking complete control of five onshore blocks, including the East-Mibale, Liawenda-Kinkasi and Muanda-Banana fields, following its purchase of stakes held by TotalFinaElf and Shell. It has had some success with the development of the Kinkasi field, which is now in production, and the company's total output in the country stands at 7,000 b/d. ChevronTexaco's Misato wildcat exploration well on DR Congo's continental shelf made a small discovery in 2000, which was brought into production in March 2001. The government of DRC argues that the current generally accepted boundary is not the result of any international political agreement, but rather the result of an arbitrary agreement drawn up with Gulf Oil after the Second World War. Gulf Oil became part of ChevronTexaco (then just Chevron) in 1984, and both ChevronTexaco and TotalFinaElf continue to work in the country today.

According to officials in Kinshasa, the dispute is depriving DRC of production of up to 200,000 b/d. Given current interest in offshore exploration in the Gulf of Guinea, the area would be of particular worth to DRC because of its very short coastline of around 22km, which results in very limited offshore acreage.

Despite Abilio's assertion, the only solution seems to be to follow in the footsteps of other nations in the region by setting up some form of JDZ. Angola itself has set up a JDZ with Congo-Brazzaville covering maritime territory beyond the area disputed by Angola and DR Congo. Developed along the lines of the Nigeria-Sao Tome & Principe JDZ, revenues are to be split 50:50. As with the contention between Angola and DRC, the dispute between the two nations had held up licensing and exploration work along their common maritime borderlands.

The JDZ, or Zone d'Interet Commun (Common Interest Zone) as it is known, lies mainly in deepwater and is to encompass part of Congo-Brazzaville's Haute Mer field, as well as Angola's Block 14.

Bruno Itoua, the chairman of Congo-Brazzaville's state oil company, SNPC, said that up to three new exploration wells are expected to be drilled within a year. He added that technical discussions on the zone had been attended by representatives of ChevronTexaco, Eni-Agip, Sonangol and TotalFinaElf. The authority for the JDZ will be based in Brazzaville and is expected to be headed by an Angolan.