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Congo Republic Pledges To Reform State Oil Firm As Seeks Bailout | The Precision

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Congo Republic plans to replace the board of
directors and appoint an audit committee at state oil company SNPC, as
it strives to improve accountability and convince international lenders
to bail out the country. 

SNPC, which holds
equity in fields operated by Italy’s ENI and France’s Total, has been
dogged by allegations of corruption and mismanagement, and the
government on Wednesday criticised the “dysfunction” of its current
set-up. 
The reform plans come as the government is negotiating
with the International Monetary Fund (IMF) for a bailout following a
steep drop in revenues due to low crude prices that has seen public or
publicly guaranteed debt balloon to 110 percent of GDP, according to the
IMF. 
Credit rating agencies judge Congo to be
at risk of default on its Eurobond because of its debt troubles, which
have been exacerbated by a $1 billion legal dispute in a United States
court. 
This was despite substantially increased
oil production, boosted by several new oilfields. Congo expects to
raise output by 25 percent to 350,000 barrels per day (bpd) next year
and leapfrog Equatorial Guinea as sub-Saharan Africa’s third-leading
crude producer. 
“It is the observation of this
dysfunction … as well as the interest in improving the performance of
the SNPC that leads the Minister Thystere Tchicaya to submit … the
proposal presented today,” notes from Tuesday’s cabinet meeting said. 
Government
spokesman Thierry Moungalla said the cabinet had approved a bill that
would replace the existing board of directors with a director general,
who would be assisted by a secretary general and three deputies. 
The
director general would also serve as chairman of the board of SNPC’s
various subsidiaries, while a new audit committee would reinforce
internal controls, Moungalla said. 
The bill now heads to parliament. 
Following
a country visit that concluded earlier this month, the IMF said it
“took note of the authorities’ intention to improve the governance of
public enterprises, including oil companies”. 
Analysts say
rampant corruption and a dysfunctional bureaucracy have prevented Congo
from capitalising on its prodigious mineral wealth. 
 
Reuters

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