New oil and gas discoveries in East Africa a catalyst for investment

30 July 2015

Not only were new oil and gas (O&G) discoveries in East Africa a catalyst for investment into road, rail and pipeline infrastructure, but they also contributed to

the region’s economic growth, with growth of 5.5% projected for this year and an estimated 6% to 7% for 2016.

Over the past ten years, O&G exploration in the region led to discoveries in seven countries, totalling billions of barrels of oil and trillions of cubic feet of gas.

Significant finds included more than 600-million barrels in Kenya, 3.5-billion barrels of commercially viable oil reserves in Uganda, 125-trillion and 7-trillion cubic feet of gas in Mozambique and Tanzania; respectively, as well as 60-billion cubic meters of methane gas in Rwanda.

In addition to these findings, reserves have been uncovered in South Sudan and Ethiopia. Frost & Sullivan best practices research analyst Siphesihle Hlela said that, while these regions were overlooked historically, O&G companies were now starting to realise the untapped potential.

The public sector was investing heavily in major projects and vast numbers of ports throughout East Africa were either being built or upgraded. “These infrastructure projects are particularly important as they will enable logistics companies to deliver equipment on-site to construction and O&G companies.

It is estimated that, once completed by 2017, these projects will enable East African countries to generate an estimated $2.6-billion a year from incoming traffic, as a result of reduced transport costs along the North–South and Dar es Salaam corridors,” Hlela pointed out.

Further, projects, such as LAPSSET showcased the unity of the East African Countries’ union in its vision to increase connectedness and the ease of doing business between these countries, which symbolised a drive for regional rather than country-specific growth.


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