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Report: East Africa new energy 'hot spot'

East Africa is the new "hot spot" for the energy market, with natural gas positioning the region as the new premier player, analysis from IHS finds.

Analysis released from Nevada finds East Africa is expected to add another 1 million barrels per day in production by 2025, led by Mozambique and Tanzania. More recently, the region is home to more than 25 percent of the natural gas discoveries made worldwide between 2010-13.

"East Africa is the new hot spot," Stanislas Drochon, director Africa oil and gas at IHS Energy, said in a Thursday statement.

Drochon said the region is going through a transformative phase and could emerge as a crucial player in the global energy sector, though a lack of infrastructure and a weak regulatory framework could drag on East African growth potential.

Italian energy company Eni is one of the major players in Mozambique and estimates a reserve potential of at least 85 trillion cubic feet of gas in place. The company said it was eager to help Mozambique become a hub for liquefied natural gas exports to Asian economies.

BG Group, a British company, said its most recent appraisal well off the coast of Tanzania yielded a sustained gas flow rate of 101 million cubic feet per day. A similar well last year flowed at 57 million cubic feet per day.

"Gas and LNG production will become a dominant revenue generator in East Africa," Natznet Tesfay, head of Africa at IHS Country Risk, said. "The accelerated growth in the gas sector will outsize the previously important coal sector, but we are unlikely to see an immediate increase in employment opportunities and local supply chain expansions."

NA
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