Natural gas discoveries put E.Africa on world energy map

Jun 19, 2012 by Johannes Myburgh
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.

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 . That's about 50 percent more than in Saudi Arabia.

"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 meters 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-percent 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.

A view of the beach on Praslin island in Seychelles. 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.

"It will bring a huge flow of foreign direct investment in the region that would contribute to in the region," said Silas Olang, east African coordinator from resources watchdog Revenue Watch Institute.

Mozambique expects that within five years, the new industry will account for 13 percent of the economy, already one of the fastest-growing in the world at seven percent last year.

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.

Statoil and Britain's BG together have discovered around 16 trillion cubic feet in Tanzania.

Mozambique's Pemba is a good example. The closest city for offshore drillers, it's 3,000 kilometers north of the capital Maputo, with dirt roads and little housing. Elsewhere new ports and airports are needed.

Completely caught off-guard by its mineral wealth, the country also lacks the skilled workforce to set up industries, with only 50 mining graduates a year.

Both Mozambique and Tanzania have had to scurry to update petroleum legislation with the new industries.

Governments have also come under fire for signing opaque contracts for capital-intensive mega-projects that don't create many local jobs.

Producers from their side are nervous over taxes as governments claim increasing cuts of the spoils. Mozambique announced it would tax the Cove sale at 12.8 percent.

New producers may also jostle for energy buyers "on the western edge of the Asian LNG import market and in competition with older supply centres in Southeast Asia and Australasia", said Clarke.

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.

Corruption is a "big challenge", said Olang.

With production only planned for five years from now, the effect may also take longer than people think, he said.

"There could be the expectation that will be exploited tomorrow and we'll benefit immediately."

Explore further: Pollution top concern for U.S. and Canadian citizens around Great Lakes

add to favorites email to friend print save as pdf

Related Stories

Nile delta natural gas potential is significant

May 24, 2010

An estimated 223 trillion cubic feet (tcf) (mean estimate) of undiscovered, technically recoverable natural gas are in the Nile Delta Basin Province, located in the Eastern Mediterranean region.

Sound waves turn natural gas into liquid

Mar 06, 2007

Worldwide, 100 billion cubic meters of natural gas is wasted every year. Now, the Denver-based company Swift LNG aims to turn that gas into a usable liquid fuel with a thermoacoustic natural gas liquefaction technology just ...

Mozambique signs 20-year Internet deal

Feb 02, 2012

Mozambique has signed a 20-year contract with Internet cable operator SEACOM to provide broadband access to government institutions and schools, science ministry official Rufino Gujamo said Thursday.

Recommended for you

Obama launches measures to support solar energy in US

Apr 17, 2014

The White House Thursday announced a series of measures aimed at increasing solar energy production in the United States, particularly by encouraging the installation of solar panels in public spaces.

Tailored approach key to cookstove uptake

Apr 17, 2014

Worldwide, programs aiming to give safe, efficient cooking stoves to people in developing countries haven't had complete success—and local research has looked into why.

Wireless power transfer achieved at five-meter distance

Apr 17, 2014

The way electronic devices receive their power has changed tremendously over the past few decades, from wired to non-wired. Users today enjoy all kinds of wireless electronic gadgets including cell phones, ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

rwinners
not rated yet Jun 19, 2012
Africa now produces lots of oil.... and all the money from the proceeds???? It isn't helping the people ... it filling the pockets of the producers and local government officials.

More news stories

Under some LED bulbs whites aren't 'whiter than white'

For years, companies have been adding whiteners to laundry detergent, paints, plastics, paper and fabrics to make whites look "whiter than white," but now, with a switch away from incandescent and fluorescent lighting, different ...

Researchers uncover likely creator of Bitcoin

The primary author of the celebrated Bitcoin paper, and therefore probable creator of Bitcoin, is most likely Nick Szabo, a blogger and former George Washington University law professor, according to students ...

Continents may be a key feature of Super-Earths

Huge Earth-like planets that have both continents and oceans may be better at harboring extraterrestrial life than those that are water-only worlds. A new study gives hope for the possibility that many super-Earth ...

Researchers successfully clone adult human stem cells

(Phys.org) —An international team of researchers, led by Robert Lanza, of Advanced Cell Technology, has announced that they have performed the first successful cloning of adult human skin cells into stem ...