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  • on 27.08.2014
  • at 11:00 AM
  • by Kevin Hind

The risk for oil and gas in East Africa 0

East Africa is predicted to emerge as the world’s new exciting gas exporting region over the next decade.Yet retrogressive and uninformed legislative changes, refusal to honour agreements and adopting erroneous policies could make capital-intensive oil and gas related projects economically unviable for the region.

The spotlight is currently on Africa for all the right reasons — its resources. In recent times, there have been frequent and substantial new finds of oil and gas in particular.

These rich oil fields and prospects for further discoveries have transformed the continent into an important player and a key “target” in global oil production and resource extraction.

A joint study by the African Development Bank and the African Union on oil and gas in Africa shows that over the past 20 years, oil reserves have grown by over 25 per cent, and gas reserves by over 100 per cent. Oil production on the continent is expected to continue to rise at an average rate of six per cent per year in the foreseeable future.

More than 90 per cent of Africa’s oil production comes from Libya, Nigeria, Algeria, Angola and Sudan. Proven natural gas reserves are concentrated in four countries — Algeria, Egypt, Libya and Nigeria — which represent 91.5 per cent of Africa’s reserves.

Large deposits of natural gas have been identified in Mozambique and Tanzania; significant oil deposits have been found onshore in Uganda and Kenya, and offshore in the western part of Ghana.

In East Africa, gas finds take the lead, and with hopes high for more oil discoveries along the shores of the Indian Ocean, the prospects for the region seem promising. Forecasts indicate that it will emerge as the world’s most exciting new gas exporting region in the next decade.

Advances in technology have encouraged exploration in previously unexplored acreage on different parts of the continent culminating in the emergence of the so called “new kids on the block” such as Uganda, Ghana, Kenya, Mozambique, Tanzania and South Sudan.

The discoveries made to date have been from relatively few wells, so there could be a lot more oil and gas that is yet to be discovered. It is envisaged that Mozambique could develop a liquefied natural gas (LNG) sector on the same scale as Algeria, which would involve capital investment of tens of billions of dollars.

Considering the current uncertainties about global energy supply, the policies of consumer countries (especially with respect to nuclear and other alternatives to oil and gas), and expected future global economic growth and advances in development, there is a need for the “new kids on the block” to establish their position by putting in place an enabling framework and developing strategies for future supply adequacy.

continue reading on The East African 

By Joseph ThogoThe East African

Photo credit: UG News

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