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East Africa–Emerging As a New Frontier among Oil & Gas Countries


East Africa is emerging as one of the most significant players in the global oil & gas industry. Huge oil discoveries made recently around the Lake Albert in Uganda and the offshore gas discoveries in Mozambique and Tanzania have begun to open up the entire East African coastline for exploration.

Exploration activities are not new in the East African region and have been in place for several decades, but their significant potential has only become evident in the recent years. Uganda with its Lake Albert oil fields, potentially capable of producing 200,000 to 350,000 barrels per day (bpd), is all set to become one of the five largest oil producers in the continent. The Onshore discoveries in Kenya have boosted exploration activities in the country, though commercial viability is still being examined. The region’s offshore arena is even more promising, according to the recent, US geological survey estimates, the offshore areas of Mozambique and Tanzania alone hold more than 250 trillion cubic feet (tcf) of gas in addition to a further 14.5 billion barrels (bbl) of oil.

International oil companies such as Tullow Oil, Anadarko and Total have been active in the region and have been the major E&P operators. Tullow Oil holds the largest number of exploration blocks up to 20 among the other oil and gas operators spread across Ethiopia, Ghana, Kenya, Liberia, Tanzania and Uganda. The company has so far made 15 discoveries in Uganda, mainly in exploration blocks 1 and 2. Another major operator Anadarko, together with its partners has safely drilled more than a dozen deepwater wells within the offshore area block 1 and discovered an estimated 35 to 65+ tcf of recoverable natural gas. Additionally Anadarko with its partners is planning to build a commercial liquefied natural gas (LNG) terminal that is initially expected to consist of four liquefaction trains each with annual capacity of 5 million tons.

The successful exploration in the region, however, is not without significant technical and commercial challenges that need to be tackled to bring the commodities to the market by the end of this decade, among which infrastructure is a major one. Tanzania and Mozambique being undeveloped countries have limited infrastructure and also have very little experience in handling large exploration projects. Technical challenges in the region are more associated with the skill shortage. Skilled workforce needs to be imported to operate the oil and gas facilities in the region due to limited availability of local personnel with required skills. The local workforce will have to undergo thorough training programs to ensure effective oil & gas sector development in the future. From the commercial perspective too, there are a range of potential hurdles that could delay the ongoing projects. The first LNG plant in Mozambique is yet to be tested if the government and the national oil company have the capability to get along the huge legislative, bureaucratic, customs, and financial challenges involved with such developments.

The global appetite for oil and gas grows dramatically despite the fact that the price to purchase energy is ramping up, and is being fuelled by exponentially growing population. To satisfy this growing demand for oil and gas, it becomes important to extract and develop the maximum amount of resources, overcoming challenges.

Related Reports:

Oil and Gas Security Market [by Applications (Exploration and Drilling, Refining and Storage, Pipeline, Transportation and Distribution), by Technologies (Physical Security, Network Security)] - Global Advancements, Forecasts & Analysis (2013 - 2018)

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