Opening oil exploration to the East Coast

The African Continent’s west coast has long been an oil rich haven for oil companies from the west to exploit, yet now with the continual discoveries of oil rich deposits in the east, companies are turning their attention to countries like Uganda, Tanzania and Mozambique to source large quantities of Africa’s oil reserve.

With the discovery of mass quantities of oil in the Lake Albert basin in Uganda in 2006, 15 other sites have been confirmed in Uganda alone. "What happened in Uganda made it easier for smaller companies to raise funding," said Tewodros Ashenafi, head of Southwest Energy. Further investigation into the basin in 2009 confirmed the basin, which is six times the size of greater London, was full possibly full of oil, with “billions of barrels of oil in place,” according to Paul Atherton, chief financial officer of Heritage oil.

With continual funding and exploration, larger oil companies are joining the rush to east Africa.  Australia’s Beach Energy Ltd. agreed to invest at least US$ 46 million in Tanzania searching for oil and gas in the unexplored western Lake Tanganyika area, French group Maurel & Prom is drilling in Tanzania, while U.S. group Anadarko Petroleum Corp. (APC) and Norway's Statoil ASA (STO) are drilling in Mozambique's Rovuma basin. Significant natural gas reserves have been discovered in Tanzania and Mozambique. Ethiopia and Somalia are also sites of intense exploration and Madagascar holds "enormous reserves," said Tiziana Luzzi-Arbouille, an African specialist with IHS Global Insight.

This influx of development has resulted in the region contributing 12% of the world’s oil and gas production in the last five years.

Even with such large quantities of oil and natural gas, there is still an issue with extraction and transportation. "The question is what we'll be able to extract. Ten percent would be pretty good."

To discuss the ongoing difficulties with oil and gas extraction industry leading protagonists from companies like ExxonMobil, Shell, Tullow Oil, BP Angola and Gambia National Petroleum Company will meet at the Oil and Gas Africa Summit in April 2011. Leading issues will centre on country-specific regulation, technology provisions for exploration in regions with harsh environmental or complex geological conditions, seismic acquisition and seismic modelling and imaging.

Infrastructure is also something which will need to be addressed in east Africa. Heritage have hinted that if their estimations are accurate then they will strongly consider building a 800 mile pipeline that runs from the Lake Albert basin in Uganda to the Kenyan coast, where it can be transported abroad. The cost would be an estimated US$ 1.5 billion, as the pipeline would need to traverse swampy and mountainous land.

Author: Jake Mazan, NG Online News.

Published on 30/11/2010

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