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East Africa: Rush Is On to Get East Africa's Oil, Gas to the Market

East Africa: Rush Is On to Get East Africa's Oil, Gas to the Market Science & Technology World Website


Oil and gas are the buzzwords in East Africa as countries try to outdo each other in getting their hydrocarbons out of the ground and into the market.

Last week, Tanzanian President John Magufuli ordered that exploitation of natural gas begin as a matter of urgency, as Kenya's President Uhuru Kenyatta announced that Tullow Oil would send the country's first barrels of crude oil to the market from March 2017 ahead of the start of exports in June.

At the same time, Uganda and Tanzania are courting the Democratic Republic of Congo, which is yet to start mining, to participate in talks with four countries sharing Lake Tanganyika border to discuss ways to extract natural gas and oil from the lake.

Ugandan President Yoweri Museveni was also reported to have invited President Joseph Kabila to join in its plans to transport its oil to the coast through the Central Corridor that passes through Tanzania.

East Africa has become the latest hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda and Kenya, while major gas reserves have been discovered in Tanzania and Mozambique.

Mid-week, British oil firm Tullow raised Kenya's hopes of becoming the first oil exporting country in East Africa after it announced plans to start producing oil from Turkana in March. The London-listed firm's count of the Turkana oil reserves so far stands at 750 million barrels, which is considered commercially viable at the current prices of $50 a barrel.

In a meeting with President Kenyatta in Nairobi, Tullow Oil chief operating officer Paul McDade said that it will initially produce 2,000 barrels of crude oil per day and have stocks ready for export in June 2017, a venture that is set to earn the region's leading economy $37 million annually.

"We have started and we are not going back. We want to be at the top of the pile. So, we have set a path and, by 2019, Kenya is going to be a major oil producer and exporter," Mr Kenyatta said.

Kenya is banking on the petrodollars to grow its economy and reduce the ballooning public debt that currently stands at $30 billion. Petroleum Principal Secretary Andrew Kamau said that the current market prices of oil make the project viable, adding that it is important to stick to the timeliness for production for maximum gain.

"As long as the crude oil remains above $34, then the project is viable. We need to move to production so that our venture remain profitable and viable for all the players," Mr Kamau said.

Analysts, however, feel that Kenya is rushing to the market to upstage Uganda and Tanzania, after the April pipeline upset. As it is, Uganda will have to wait for the construction of its pipeline to move the oil to the coastline, while Kenya has already devised an alternative plan that will see its oil move by road to Eldoret, then by train to Mombasa and into the export market.

The $32 million Leseru-Lokichar Road, which is expected to connect the remote Turkana site to Eldoret, is nearly complete, and the Cabinet okayed plans for the expansion of the Kainuk bridge that will now allow larger trucks move huge quantities of crude oil.

Dr Kibambe Musa, an oil and gas resource analyst, says Kenya's move is politically driven, as it seeks to show its peers in the region that it can still get its oil out first and push it to the market through alternative routes.


East Africa: Tanzania to Cooperate With Uganda in Oil Pipeline

East Africa: Rush Is On to Get East Africa's Oil, Gas to the Market Science & Technology World Website


President John Magufuli has assured his Ugandan counterpart Yoweri Museveni of full cooperation in accomplishing the construction of crude oil export pipeline from Hoima District in Uganda to the Indian Ocean port of Tanga.

According to a press statement issued by the Directorate of Presidential Communications, Dr Magufuli made the assurance in Kampala during his talks with the Ugandan leader.

He arrived in Uganda to attend President Museveni's inauguration slated for Thursday. At the Entebbe International Airport, he was received by Ugandan Works and Transport Minister John Byabagambi and Uganda's High Commissioner to Tanzania, Ms Dorothy Samali Hyuha.

Uganda's Assistant Inspector-General of Police Andrew Felix Kawesi was also present at the airport to receive the Tanzanian leader. Dr Magufuli is popular in Uganda for the radical changes he has embraced in Tanzania, including spearheading the fight against corruption, since he took over office late last year.

He joins two other dignitaries, King Letsie III of Lesotho and the Prime Minister of Swaziland, Dr Barnabas Dlamini, who arrived in Uganda on Tuesday evening. He then headed to State House Entebbe for an official welcoming ceremony.

This is the second time for Dr Magufuli to travel outside the country since becoming president. He first travelled to Rwanda last month. President Museveni recently endorsed his country's decision to construct the pipeline through Tanzania during the 13th Northern Corridor Integration Projects (NCIP) Summit in Kampala, which was also attended by President Paul Kagame and Uhuru Kenyatta of Rwanda and Kenya, respectively.

The envisaged pipeline through Tanzania will be of benefit not only to Uganda and Tanzania but other countries in the region such as Kenya, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo (DRC).

Officials from Uganda and Tanzania convened for the first time in Tanzania last month to discuss work plan for the development of the proposed 8.7 trillion/-crude oil export pipeline.

 

Transporters Hail Uganda Oil Pipeline Arrangement

East Africa: Rush Is On to Get East Africa's Oil, Gas to the Market Science & Technology World Website


Transporters have applauded President John Magufuli for his efforts that won the Ugandan oil pipeline deal, challenging all Tanzanians to aggressively go for the business opportunities to be created.

The Tanzania Truck Owners Association (TATOA) also paid special tribute to the negotiation team under Energy and Minerals Minister, Professor Sospeter Muhongo, for the job well done.

"The president has done a commendable job to win this giant project ... it's now upon us stakeholders to join hands and go for immense business opportunities that the project brings," TATOA Chairperson, Ms Angelina Ngalula, said in Dar es Salaam.

She said the construction of the 1,400-kilometre pipeline that would transport crude oil from Hoima in Uganda to Tanga Port will create huge business opportunities, which will, however, require aggressiveness to grab them.

Ms Ngalula said all transport and port stakeholders were duty-bound to strategically and creatively work out plans to exploit maximum benefits out of the project.

"President Magufuli and his team in the government have indeed done a great thing for the development of the national economy, it's now upon us to support this great feat," she urged.

Through the multi-trillion project, the TATOA Chairperson said, Tanzania can easily use the opportunity to promote her ports and attract more investors and customers, thus strengthening the economy.

"This opportunity is huge. It will put our Tanga Port in the world map. It makes sense for all port stakeholders to join forces by grabbing this opportunity," she stressed.

The transporters also commended Prof Muhongo for what they described as his patriotism during the execution of the Mtwara-Kinyerezi gas pipeline in which local companies were given priority in the project's transport requirements.

"We have faith in Prof Muhongo, believing that under his leadership, indigenous people and local firms will get special preference in the execution of the oil pipeline project," said Ms Ngalula.

TATOA Chief Executive Officer Emmanuel Kakuyu said after winning the pipeline, it was now upon all stakeholders to ensure that construction materials for the project are shipped through the Dar es Salaam Port.

"We are duty bound to work hard in ensuring that our competitors are not taking this business ... it's our responsibility to cooperate and succeed," said Mr Kakuyu.

Meanwhile, the truck owners have commended President Magufuli's efforts to consolidate business relations between Tanzania and Rwanda, asking for similar initiatives for Zambia and the Democratic Republic of Congo (DRC).

"President Magufuli's tour of Rwanda has motivated more Rwandan traders to rethink using the Dar es Salaam Port. There is an increased interest among Rwandans to use the port after the president's visit to Kigali," noted Ms Ngalula.

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