As East African nations line up to become the next key oil and gas market, now is the time to enter the game, but beware the pitfalls. Major discoveries are tantalizingly promising, but questions of infrastructure to make them commercially viable, uncertain regulatory environments and the potential for conflict put up plenty of roadblocks. Oilprice.com examines five key markets inside-out.
Kenya is East Africa’s largest economy, and a major discovery in March 2012 has set it on the oil map and promises to turn the country into the region’s main energy hub. Unlike its neighbors, Kenya’s capacity for infrastructure development is more ambitious and its plans are feasible, if not perhaps overly optimistic in terms of estimated completion dates.
The oil juniors are having trouble keeping up with their contractual obligations, and we’re likely to see some buy-outs and joint ventures in the near future, as Kenya seeks major players who can contribute to its massive infrastructure plans.
Oil companies are still about a year away from determining whether they can extract what they’ve found and turn it into revenues. But Kenya is confident. This confidence is expressed in the largest African infrastructure project ever—the Lamu Port-South Sudan-Ethiopia Transit corridor (LAPSSET). The corridor includes a new export terminal and refinery at Lamu, a 2,000km pipeline that hopes to pump oil from South Sudan to Kenya,…