This archive report was first published on 26 August 2020.
East Africa's crude oil exports have been shrouded in uncertainty for years, with investors facing numerous challenges that have led to delayed investments and missed opportunities.
Since 2014, the global and regional oil and gas sectors have been plagued by a series of setbacks, including doubts about future oil demands and prices. This has led to a decline in investor confidence, with many opting to postpone or cancel their investments in the sector.
One of the main reasons for this uncertainty is the growing momentum of renewable energy. Climate change advocates have been relentless in their pursuit of renewable energy sources, leaving oil investors unsure of what risks to take in new oil ventures.
Kenya, which discovered commercial oil reserves in 2012, is a prime example of this uncertainty. The anchor investor, Tullow, has withdrawn from the Turkana oil project, and despite efforts to revive the project, there is no clear indication of when or if Kenya will export its first oil.
Uganda, which discovered oil in 2006, faces similar challenges. While the country has better capitalized investors and higher crude oil volumes, the ongoing budgetary rationalization and green renewable challenges facing major oil companies are also affecting Uganda's oil sector.
Tanzania, on the other hand, has successfully commercialized natural gas for local power generation and industrial fuel, but its slow pace in finalizing investment policies and regulations for export LNG investments has led to investor frustration.
Only Mozambique has made significant progress in the region, with billions of dollars committed to LNG development and exports.
