Petroleum Africa
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Thursday, December 3, 2015
It is not an industry secret that one of the hottest spots currently for oil and gas exploration on the African continent is East Africa; however, the region is not only a hotbed for the petroleum sector, but also an emerging investment destination for all types of energy related investments.
The region is poised for a surge in economic growth due to its potential to become one of the largest producers and exporters of oil and natural gas in the world. As countries like Tanzania, Kenya, Ethiopia, and Rwanda see their economies grow, so does their energy needs, which in turn creates a rush for them to turn to the traditionally depended on biomass to meet energy needs.
What this represents is an immense opportunity for companies specializing in oil and natural gas exploration and production, power generation and associated infrastructure, as well as renewable energy technology commercialization, according to new analysis from Frost & Sullivan.
The Frost & Sullivan analysis, East Africa Energy, finds that due to the potential in the region, East Africa will possess more than 50,000 MW of generation potential by 2030, dominated by hydro, coal, wind, and geothermal; natural gas based generation systems will also play a big role in the East African region’s move away from the more costly and carbon intensive crude powered energy. The Frost & Sullivan analysis said that 80% of the potential gas reserves in East Africa are concentrated around Mozambique and Tanzania, while the majority of these reserves are destined for export through LNG plants, these countries could benefit from the rapid development of gas power projects to meet growing electricity demands in the region in the short term.
“Energy development is gaining priority as East African economies look to attain middle income status over the next decade,” said Frost & Sullivan Energy & Environment Senior Research Analyst Neeraj Sanjay Mense. “In view of this objective, governments in the region are adopting strategies to diversify the energy mix as well as encourage private sector participation.”
There are business investment opportunities a plenty burgeoning throughout the region and Frost & Sullivan says that investment from private sector is critical, as in order to reach its full potential government subsidies alone are not enough.
Challenges to attaining its full energy potential through financing include political stability and security, as well as the lack of adequate infrastructure and skilled resources. “An adoption of mechanisms to share technical knowledge through international cooperation will ensure steady growth,” observed Mense. “Collaboration with experienced project developers will also be imperative to accelerate technological advancements and implement the respective plans within the East African energy sector.”
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