East Africa

Article: Huge oil, gas deposits wait for investors
By: Adam Ihucha (Arusha)
Source: The Guardian (Tanzania), 8 Mar 2007, front page
President Jakaya Kikwete yesterday called on investors to make full utilization of huge but untapped oil and gas potentials in the East African region. Addressing the third East African Petroleum Conference here, President Kikwete advised them to invest in the petroleum services sector in order to seize the existing vast potentials.”The East Africa region is rich in oil and gas resources,” he said as he opened the meeting that deliberated on the region’s petroleum potentials and investment opportunities. “I call upon investors represented here to seriously look at these potentials then establish petroleum service companies. The region is very keen to see investment in both oil exploration and exploitation,” he added.

The three-day conference, dubbed EAPC‘ 07, Kikwete’s brainchild, has been organized under the main theme: “Together Unveiling the Untapped Oil and Gas Potential.”He said East Africa was not only a source of gas and oil resources, but also provided potential markets for petroleum and related products. Oil consumption in East Africa stands at over 32 million barrels per year, while demand for petroleum in the world market is above 82.5 million barrels per day, which is growing at a rate of 1.3 percent.

“Incresed demand and prices in the world market provide an opportunity for East Africa to benefit from its potentials,” President Kikwete said. He appealed to investors to be innovative by charting out cost-effective strategies in the utilization of oil resources. “It is hig time that companies that have signed agreements our governments, which are licensed to explore these resources, became serious and fullfilled their committments,” said Kikwete.

The president said partnership between investors and government should also benefit local communities surrounding the investments. “This is the biggest challenge…we have to ensure that exploitation of these resources benefits our people and investors, and contributes to our countries’ growth,” he added. For this part, EAC Secretary General Juma Mwapachu said the meeting, which attracted about 300 delegates, had been convened at a time when the energy sector globally faces unprecendented change and uncertainty.

“Increased demand for energy – especially in developing economies – the shifting of supplies of oil and natural gas to the remote and often geopolitically unstable areas and environmental impacts, are some of the factors behind the mess,” Mwapachu said. “These unprecedented challenges demand complex and urgent responses cutting across strategic, organizational, operational, and technological and investment decisions”, he said.The EAPC‘ 07 comes against a backdrop of the recent discovery of commercial oil and gas deposits in the region.

In collaboration with experts, the EA partner states – Tanzania, Kenya and Uganda – are currently drawing up policies and strategies to facilitate effective exploration of these resources. An official from the Petroleum Exploration & Production Department of Uganda’s Ministry of Energy & Mineral Development, Fred Kabanda, said Uganda had licensed six companies to undertake petroleum exploration. “We are currently considering another five applications. In fact, the regionis becoming famous in terms of petroleum development sector.

More companies are coming for petroleum exploration in the Rift Valley base in Kenya, Tanzania and Democratic Republic of Congo. There are also offshore sites in Tanzania that are being explored”, he said. Reports say two companies – Hardman Resources Ltd and Tullow Oil, discovered a significant amount of oil depostis at the Waraga-1, Mputa-1 and Mputa-2 wells in the west of Uganda. Tanzania is producing natural gas from its Songo Songo field, while another field, the Mnazi Bay Gas, is being developed for a gas-to-electricity project.

In Kenya, Woodside Energy Ltd has acquired more than 11,000 line kilometres of additional 2D seismic data in offshore areas. China National Oil Company has also signed Production Sharing Contracts with the government of Kenya for six onshore blocks in the areas of Lamu, Anza and Mandera Sedimentary Basins. According to information available at the EAC secretariat, a number of oil comapnies have shown interest in both offshore and onshore blocks in Kenya.