Russian Inroads Into Central Africa (Part Two)

*To read Part One, please click here.

Beginning in 2019, Russia intensified its outreach to some Central African countries—particularly, the Democratic Republic of the Congo (DRC) and the Republic of the Congo (hereafter, the Congo). Russian interests in the region are premised on a combination of geo-economic and geopolitical calculations, including attempts to use both actors (primarily, the Congo) as a foothold from which it can reach the markets and vast natural resources of West Africa (see Part One in EDM, April 23). To achieve its objective, Russia primarily relies on two pillars: assisting in natural resource–related projects and military-technical cooperation.

One of the most important Russian firms engaging in natural resource projects in the region is Lukoil Oil Company, which perceives Western and Central African oil deposits as strategically important for the company. As Lukoil CEO Vagit Alekperov noted this past January, at the Davos Economic Forum, his company is particularly engaged in the offshore Zafiro Oil Field, in Equatorial Guinea (Vedomosti, January 23). Later, in a conversation with Russian President Vladimir Putin, Alekperov expressed confidence that Russia’s opportunities in Africa are vast and “unprecedentedly beneficial,” with three main destinations most economically viable: the Congo, Ghana and Cameroon (RBC, January 28). Incidentally, in earlier statements, Alekperov also identified Nigeria as one of the most desirable prospective objectives for Lukoil’s expansion (Oilcapital.ru, October 18, 2019). Yet, given the level of competition and the size of the local economy, the Nigeran oil market—despite a Memorandum of Understanding (MoU) signed between the Russian company and the Nigerian National Petroleum Corporation (NNPC)—for now, remains a desirable though hardly achievable target.

The most realistic course of action for Russia involves reaching out to smaller and less economically powerful players, such as the Congo. In effect, in 2019, Lukoil acquired a 25 percent share (worth $800 million) of the Congolese Marine XII offshore project from New Age M12 Holdings Limited. Marine XII has a daily production capacity of around 28,000 barrels of oil and 1.7 million cubic meters of natural gas. One interesting detail of the deal is premised on the fact that New Age is controlled by HOPU Investments, a leading China-based private equity firm, with total assets of $4 billion, and branches located in Beijing, Hong Kong and Singapore. As noted by one Russian source privy to the details of the deal, Lukoil paid for a share in the Marine XII block via an auction organized by Citibank (Vedomosti, June 6, 2019).

Another notable and rather unexpected player in the Congo is VEB.RF, a Russian state development corporation (founded in 2007), whose Supervisory Board chairperson is current Russian Prime Minister Mikhail Mishustin. During the October 2019 Russia-Africa Summit in Sochi, VEB.RF, along with Russian Export Center JSC (REC), signed a memorandum with Société Nationale des Pétroles du Congo (a national oil company of the Republic of the Congo) on building a pipeline for the transportation of petroleum products. The African side of the deal was supported by the African Export-Import Bank (Afreximbank)—an institution implicated in a suspicious $2 billion investment spent by the Russian government on the “development of African trade” (Rucompromat.com, October 30, 2017).

The proposed pipeline, with an expected capacity of 2.1 million tons per year, would be capable of transporting gasoline, diesel, and jet fuel. It will be connected to Pointe-Noire, the second largest city in the Congo, and other oil terminals located in Congolese territory. The project’s anticipated construction term is three years. Importantly, the pipeline is also expected to supply the DRC and the Central African Republic (CAR). These two countries are by no means an accidental choice. Both already have a growing Russian presence (especially in the CAR, where Russian private military instructors have been operating), and both countries are experiencing serious difficulties with exploiting energy and petroleum products. As noted by the management of VEB.RF, this pipeline project could become an important stepping stone for Russian products to gain access to African markets (Interfax, October 23, 2019).

One crucial precondition for successful business operations in Africa is knowledge of the local market conditions and connections with the “right people,” something that could be secured by the Russian side by engaging Afreximbank. The financial entity has already become an essential partner for VEB.RF in Africa. Furthermore, at last autumn’s Sochi summit, VEB.RF and Afreximbank signed an agreement that turned the Russian company into a shareholder in the bank (Akm.ru, October 25, 2019). For the Russian side, this will facilitate market entry and minimize risks associated with operations in the African market.

The second crucial element meant to secure Russia’s advance in the Congo is military-technical cooperation. Incidentally, this area was an important bridge between the Congo and the Union of Soviet Socialist Republics (USSR) during the Cold War: in 1981, Congolese President Denis Sassou Nguesso (who holds the same position today) traveled to Moscow to meet with Leonid Brezhnev. The two leaders notably signed a 20-year friendship agreement. Following a protracted period of inaction and the subsequent collapse of the USSR, the first step in reestablishing closer ties occurred in 2019, when the Kremlin declared that Russian military specialists would be sent to the Congo (Vzglyad, May 25, 2019). According to Putin’s spokesperson Dmitry Peskov, Russian military specialists will “service [the host country’s] Russian-made military hardware and equipment” (Vzglyad, May 24, 2019). To date, Russian claims about the non-combat nature of the military mission appears to be accurate. However, the Congo borders the CAR—where both an official and “non-official” Russian military presence is currently well known thanks to broad-ranging evidence (see EDM, January 23, 2019).

In the longer term, Russia could employ the same pattern in the Congo as it followed in the CAR to secure its economic interests in the country. Military-technical cooperation is used by Russia not only in Central Africa (DRC, the Congo), but also in neighboring Gabon—which additionally has strategic importance to the United States. In 2019, the Russian Ministry of Defense announced that a first batch of weaponry would be sent to Gabon under the formal pretext of assisting anti-poaching operations (Izvestia, November 28, 2019). Incidentally, the episode signifies a new milestone in Russia’s growing presence in Africa—until now, nether Russia nor the USSR had ever exported weapons to this African country.

From a strategic prospective, it is not only Russia that “needs” Central Africa—interest in developing this relationship is mutual. Namely, the regional governments believe they may be able to use the “Russian factor” as a counterbalance against the West and (growing) Chinese presence.