Welcome to the 2014 edition of the Deloitte Guide to Oil and Gas in East Africa
In the twelve months since our first edition, East Africa has continued to hit the industry headlines and it seems safe to predict that this will continue for the rest of 2014. September 2013 saw Uganda issue its first production licence (for the Kingfisher field) with the expectation that others will follow in 2014, along with finalisation of plans for a new oil refinery at Hoima. In Tanzania continuing exploration has added to the country’s offshore gas reserves and a new licensing round was launched in October. Mozambique is expecting FID for its huge offshore gas reserves during 2014 with plans to construct a 4 train LNG plant with a 20 million tonne per year capacity. Kenya has seen further exploration success with Tullow indicating total oil reserves of approximately 600 million barrels in its onshore blocks in Northern Kenya and further offshore drilling is planned for Kenya’s exclusive economic zone in 2014.
Our new edition updates the information provided last year but also adds a new country: Ethiopia. Whilst Ethiopia far enjoyed only limited exploration success it does have potentially commercial gas reserves and promising geology. We expect interest in this country to increase in the coming months.
Expectations across the region are high, but there is still a long and (perhaps) winding road to follow before upstream oil and gas exploitation starts to deliver results in terms of higher living standards and increased tax revenues for governments. Unfortunately there are already signs of impatience and managing expectations is going to be a key challenge in the coming years, not only for the oil and gas companies themselves, but also, even more importantly, for governments and politicians. It also needs to be remembered that massive investments are required and governments need to maintain a welcoming environment for the foreign investors who will provide the billions of dollars of finance.
As a professional services firm with a long history of working with the oil and gas industry (both private sector players and governments), Deloitte is committed to making oil and gas a success story for this region. I hope and expect that future editions will chart that success.
Finally I must thank my Deloitte colleagues who contributed to this guide: Eugenia Santos and Celia Meneses from our Maputo office; Nikhil Hira from Nairobi; Patronella Namubiru and Matthew Tallarovic from Kampala; Getu Jemaneh from Addis Ababa; and Graham Sadler and Lydia Thevanayagam from Deloitte’s Petroleum Services Group in London. I must pay special thanks in addition to Linda Ndungu of our Dar es Salaam office who has assisted me with editing and statistical research.