EAST Africa has discovered huge offshore gas deposits (300trillion sqm) and onshore heavy oil reservoirs in Uganda that have drawn the interest of the world’s largest oil and gas explorers.
Companies such as BP, CNOOC, ONGC, Ophir, Petrobras, Anadarko, ENI, Statoil, Exxon Mobil and Shell – each has spent on average $2billion in the region.
Each individual country in East Africa is at a different stage of their oil and gas evolution which make for different opportunities for Scotland’s supply chain.
- Kenya is still in the exploration phase. Production will be 2026, more so onshore.
LAPSETT ( Lamu Port-South Sudan-Ethiopia-Transport ), which is a pipeline project from South Sudan, a new refinery at Lamu and new roads and rail to be delivered by the Chinese, is in jeopardy. Opportunities to support NOCK (National Oil Corporation of Kenya) with consultancy exist.
- Uganda is at the start of development phase with the first production tender won by CNOOC on the Kingfisher field (Tullow and Total are farmed in) and will have to wait for their refinery, CPU and pipeline infrastructure to be complete.
Production will be 2022. The ministry is insisting on OPITO-accredited training.
A new airport and refinery at Hoima is to be built.
- Tanzania has finished its pipeline infrastructure but is waiting on the completion of LNG plants – Production will be 2020.
A 1500km pipeline will run from Uganda to Tanzania. Technical training opportunities and SME partnership are abundant.
- Mozambique has still to build its onshore pipeline infrastructure but is closest to final investment decision. Production could be 2020.
Technical training and SME partnership opportunities are abundant.
SDI supported Aberdeen City form their relationship with Pemba, and as result a framework agreement will make it easier for companies to work there.
Although SDI has an emphasis on West Africa, SDI has responded to the opportunities with the following activity in East Africa aimed at introducing Scotland's oil and gas industry to East Africa.
January and February 2013
I spent a month in Uganda and a month in Tanzania, working with the local UKTI teams out of the British High Commissions.
I met with the IOCs, NOCs, international production services and engineering companies, international supply chain, universities and colleges to understand the future opportunities for the oil and gas supply chain in these countries and how to do business.
As a result, I have led trade missions to East Africa over the last four years.
February 2014
Nine Scottish supply chain companies and two education providers went to Kenya, Tanzania and Mozambique. The education providers won orders.
March 2015
Seven Scottish supply chain companies and six education providers went to Tanzania and Mozambique. The education providers won orders and formed JVs.
April 2016
Gary Soper, SDI’s Africa Manager and I went to Kenya, Uganda, Tanzania and Mozambique
October 2016
Six oil and gas technical skills providers and three colleges are going to Tanzania and Mozambique.
The oil and gas activity in the region has stalled, because of the following:
- Unstable market conditions
- Political distress
- Local procurement challenges
- Regulatory issues
- Uncertain labour availability and productivity
- Staffing challenges
- Safety issues
Therefore the key opportunities that SDI sees in the region are in the education sector.
The ministries with the above countries do not have budget for training.
The countries rely on donations from the operators and aid agencies.
SOGA (Skills for Oil and Gas in Africa - an aid fund made up from the Department for International Development, Gernam international organisation GIZ, Nor aide and Shell) has a $50million budget to deliver training but has been slow to respond to the needs of all four countries.
SDI is working closely with SOGA as Scottish oil and gas expertise is required by the operators.
- The Chamber is holding a free Exploring East Africa event on November 8. We welcome Richard Benyon, UK Government's Trade Envoy for Mozambique, and Gordon McIntosh, director and chairman of Aberdeen International Associates to talk about opportunities in the area.