February 25, 2014
Mark Young
Evaluate Energy
East Africa could become the world’s next oil and gas export hub by 2020, according to a new report by Evaluate Energy. There are three countries with ambitions to make this a reality; Kenya, Mozambique and Tanzania. If even one of these countries achieves its goals, the impact on the global oil and gas industry would be very significant indeed.
The landscape of African oil and gas has changed very little in the last 20+ years. Historically, it has been the more economically developed Western and Northern countries that have produced the most oil and gas. Only Angola has stepped out of relative obscurity since 1990.
Source: Evaluate Energy
Angola has changed dramatically since 2000 and is the only country in the last 25 years to have increased production from under 500 bbl/d to rival the continents biggest 4 producing countries; Algeria, Nigeria, Libya and Egypt. Every other country in Africa produced 100,000 boe/d or less in 2012. African oil exports have therefore been restricted to coming from 4 of these 5 countries as well; Egypt is the only one of the big producers to import more oil than it exports. Angola is now the second largest oil exporter compared to its imports in the entire continent; Angola exports 1.7 million more barrels of oil than it imports each day. Angola also has a Liquefied Natural Gas (LNG) export terminal with a capacity to export 5.2 million tonnes of LNG per year (mtpa) that became operational in June 2013. Angola has shown just how quickly things can change with major investment into a developing country with large natural resources.
Recent developments in the exploration and production industry in 3 East African countries - Kenya, Mozambique and Tanzania - have laid a possible foundation for one or maybe some of these countries to follow in Angola’s footsteps on the path to exporting oil and gas on a major scale. This would end a 20+ year period of relative status-quo – Angola notwithstanding – on the continent. All 3 of these countries should be the main attraction of any new African investment before the end of the decade because of these export ambitions, which could represent a major opportunity for all E&P companies involved in the region, no matter their size.
These 3 export projects, which are the focus of Evaluate Energy’s new East Africa Oil & Gas Outlook report, make East Africa the continent’s region to watch for the remainder of the decade and the E&P companies involved very interesting prospects in the immediate future.
Overview of East African Export Ambitions:
- Kenya – The $25.5 Billion LAPSSET Project is underway, focused on exporting oil and gas from 3 countries out of Lamu Port on the northern coast.
- Mozambique – Multi-tcf deep-water gas discoveries by experienced IOC’s have been made and wealthy NOC benefactors mean that LNG exports are a real possibility in the very near future.
- Tanzania – Huge gas discoveries by IOC’s with LNG export ambitions and a separate Chinese-backed mega-port at Bagamoyo is planned.