Gas finds put East Africa on energy map

Massive offshore gas discoveries in East Africa are catapulting the region into a major player in the global energy arena, bringing billions in investment that could transform entire economies.


Off the pristine beaches of Africa’s Indian Ocean coast, multinationals have struck gas — well upon well upon well.


Planned investments worth tens of billions exceed the gross domestic products of some host countries, which range from regional power Kenya to impoverished Mozambique.


East Africa’s coastal region, stretching out to Seychelles holds 441.1 trillion cubic feet of natural gas, according to the US Geological Survey. That’s about 50 per cent more than in Saudi Arabia.


Potential for more


“The gas discoveries offshore in Mozambique and Tanzania are large and world-class, with potential for more to come, including prospects for an oil leg,” said Duncan Clarke, CEO of oil consulting company Global Pacific.


“These finds will lead to LNG (liquefied natural gas) plants... and will make the zone akin to the Northwest Shelf in Australia,” which can produce 23 billion cubic metres a year, he told AFP.


Houston-based Anadarko in June announced new finds in northern Mozambique, which brought its estimated recoverable resources to up to 60 trillion cubic feet.


The company has proposed $15 billion in investments to set up LNG facilities. Mozambique’s GDP last year was $12 billion.


Thailand’s PTT Exploration and Production in May announced a $1.9-billion deal to buy Cove Energy, whose 8.5-per cent stake in the Mozambican fields is currently up for sale.


Two weeks earlier, Italy’s ENI, the other large operator in the country’s Rovuma basin, said recent discoveries boosted its recoverable resources up to 52 trillion cubic feet. (1.4 trillion metres).


Direct investment


“It will bring a huge flow of foreign direct investment in the region that would contribute to rapid economic growth in the region,” said Silas Olang, East African coordinator from resources watchdog Revenue Watch Institute.


A number of hurdles stand between producers and their potential gas wealth.


“There’s very limited infrastructure in place,” said Tim Dodson, vice president for exploration at Norway’s Statoil on the company website.


Questions remain how locals will benefit from the multi-billion-dollar industries.


While Mozambique is booming, last year its economy created only $400 per person.

Source :