Saturday, June 22, 2013
Africa is in the middle of an incredible energy boom that is likely to
last decades, according to energy industry executives who gathered this
week in Kenya's capital in a sign of the region's growing prominence.
last couple of years have seen significant oil and gas discoveries in
Kenya, Uganda, Tanzania and Mozambique. Even Somalia hopes to get
onboard though security woes and a lack of regulation make the
likelihood still years away.
"This region was definitely
underexplored in the last decade," said Martin Trachsel, the chief
executive of South Atlantic Petroleum Limited. "Most companies were
exploring in West Africa. It's part of a general trend of people looking
for more oil."
New technology also has contributed to the string of new discoveries, he said.
"The industry is innovative. It always finds new plays and new ways of finding oil and gas," Trachsel said.
president announced last year that oil had been discovered there for
the first time. Tullow Oil, which is carrying the exploration in the
region, has reported progress in bringing the oil to market, though no
date for that has been announced.
Uganda, which has confirmed oil
deposits of about 3.5 billion barrels, wants to extract at least 1.2
billion barrels over the next three decades. That figure could rise when
more oil blocks are put up for exploration later this year, potentially
making Uganda one of Africa's top oil producers.
"It won't be
boom and bust. We're talking about fairly large reserves," Trachsel
said. "It will have a 40-year lifetime or more."
Allegations of corruption in the oil procurement progress already have dogged the situation in Uganda, though.
independent lawmaker fingered three government ministers he believed
had been bribed by foreign oil companies seeking contracts with Uganda's
government. The charges, denied by the three officials, forced
lawmakers across the political spectrum to order an investigation. That
investigation is still ongoing two years later.
Trachsel said that
oil companies can influence whether the oil industries' activates in a
given country become corrupt, but he said "ultimately it's the
Another East Africa region that could also
hold energy reserves is Somalia. But Somalia brings with it problems
like piracy, clanism, corruption, and a lack of a central bank, said
Alec Robinson, president and chief executive of London-based Temo
Perhaps the biggest obstacle: "There is no legal
framework for oil exploration," he said. "A law is planned but it needs
work, and the support of regional states. There's a lot to do in
Somalia. Don't expect this to happen soon."
Petroleum is currently working in Benin and Nigeria in Africa's west,
and in Madagascar and French overseas territories in the east. Trachsel
said his company will continue to develop its business in Nigeria and in
other regions of sub-Saharan Africa, areas he called high risk but
potentially high reward.
"Bringing Africa and some of these
countries out of poverty is positive for all parts of the world. Poverty
causes instability and that can lead to conflict. I think the U.S.
would be very glad to see the average income of the population increase
in Africa," he said.