AFRICAN ENERGY: Integration Key To East Africa's Oil And Gas Sector!

February 1, 2015 - AFRICA - The integration of East Africa is vital to developing the region's nascent oil and gas sector, says Rand Merchant Bank (RMB's) Lisa Brown.

“What these countries need to do in this time is develop the regional story around oil and gas, develop policy alignment across the region, particularly in terms of infrastructure,” she said in an interview with CNBC Africa.

One of the major challenges identified by organisations in the oil and gas industry is that East African countries not only lack infrastructure and technical expertise, they also lack distinctive oil and gas policies.

“These countries need to revisit and restrategise their legislations,” Brown added.

Moreover, some analysts have perceived that falling global crude prices could hamper the growth of discoveries in Uganda, Kenya, South Sudan, Ethiopia, Tanzania and Mozambique.

Several of these countries have also emerged as some of the most prolific oil and gas exploration regions in the world over the last 10 years.

“In the short term there will be definitely be winners in terms of the current account. We have got countries in East Africa importing most of its oil,” Brown said.


WATCH: Oil & gas sector outlook for East Africa in 2015.

"In the long term though, this oil price slump comes at a time of rampant production, an increase in supply in the global oil market, and this restrains investment decisions from oil and gas companies."

Sarah Warren, a structured trade transactor at RMB recently stated that East African countries may not have to bear the negative impact of oil prices like other countries that are already producing oil.

“Oil producing communities obviously are the losers in this situation but if you look at the East Africa community, with the exploration progress of oil and gas, there could be some positive and negative impacts of the low oil price,” she said.

Despite the falling crude prices, British firm, Tullow Oil has said they will continue their drilling and production activities in Kenya and Uganda.

“Our East African projects are long-term, multi-decade projects and variations in the oil price, which are expected over the life cycle of these very long-term projects, do not fundamentally change their value,” Tullow said. - CNBC Africa.

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