|An oil rig. These monsters discover oil from the earth's bowels|
In the last decade or so, commercially viable oil deposits were found in South Sudan and Uganda. Natural gas has been found in Tanzania while in Kenya an oil find announced this week, is awaiting commercial verification. There are reports of viable oil deposits in lawless Somalia.
Since it takes about three years or so to verify commercial viability, the implication here is by 2016/17, this region of an estimated population of 200 million people will be a major player in the world’s energy market. An exploration mapping high potential areas in Kenya, indicates that eastern Africa could rival some middle east oil producers.
The frequent discoveries raise confidence on the potential of the region’s fossil oil’s exploration. This is expected to attract more investments into exploration in eastern Africa. So far an estimated US$8 billion has been sunk in oil exploration since 2006. However, this figure is expected to rise as more explorers seek licenses to explore for oil and gas deposits.
Tanzania for example, will hold an oil exploration licensing round for 16 offshore blocks starting in September this year, reported Reuters. Some firms spend an estimated US$2 million a day in oil exploration in east Africa, say sources in the energy sector. Tullow oil Plc, which discovered oil in Uganda, Kenya and Ghana is said to have sunk an estimated US$800 million in Uganda.
It is not clear how much has sunk in Kenya where it has struck oil at the first well. The find, what they describe as 20 metres of net oil, was struck at 1,041 metres way below the expected depth of 2,700 metres. The company says it will still drill up to 2,700 metres.
Apart from spending on exploration, more investment is expected in construction of infrastructure, Including Refineries, Oil Pipeline, railroads, roads and other related infrastructure. See http://eaers.blogspot.com/2012/03/africa-high-return-ppp-market-of.html . In Uganda, reported the East African, the consortium led by Tullow oil Plc will sink another US$10 billion to build such infrastructure. Tanzania will invest some US$1.1 billion to build a gas transportation pipeline from Songo Songo wells to Dar-Es-salaam, the capital city.