East African Oil & Gas Market 2014-2024

East African Oil & Gas Market
2014-2024
Upstream & Midstream Spending in Tanzania, Mozambique,
Kenya, Uganda, Ethiopia, South Sudan & Somalia
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Contents
1. Report Overview
1.1 East African Oil & Gas Market Overview
1.2 East African Oil & Gas Market Structure
1.3 Why You Should Read This Report
1.4 How This Report Delivers
1.5 Key Questions Covered by This Analytical Report Include
1.6 Who is This Report For?
1.7 Market Definition
1.8 Methodology
1.9 Frequently Asked Questions (FAQs)
1.10 Associated Visiongain Reports
1.11 About Visiongain
2. Introduction to the East African Oil & Gas Market
2.1 Critical Issues in the East African Oil and Gas Market
2.1.1 Political (In)Stability
2.1.2 Economic and Energy Sector Development
3. The East African Oil & Gas Market
3.1 East African Oil & Gas Market Forecast 2014-2024
3.2 East African Oil & Gas Submarket Forecast
3.2.1 East African Upstream Exploration & Development (E&D) Market Forecast 2014-2024
3.2.2 East African Midstream Market Forecast 2014-2024
4. East African National Oil & Gas Markets 2014-2024
4.1 East African National Oil & Gas Markets Forecast 2014-2024
4.2 East African Oil & Gas Market Barriers to Entry Analysis 2014-2024
4.3 Tanzanian Oil & Gas Market Forecast 2014-2024
4.3.1 Political and Economic Climate in Tanzania
4.3.2 Doing Business in Tanzania
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Contents
4.3.3 Tanzanian Production, Consumption and Reserves
4.3.4 Oil & Gas Sector Organisation
4.3.5 Tanzania’s Licence Blocks and Current Activity
4.3.5.1 BG Group and Ophir Energy in Blocks 1, 3 and 4
4.3.5.2 Statoil and ExxonMobil in Block 2
4.3.5.3 Plans for an LNG Terminal
4.3.5.4 Other Activity in the Tanzanian Oil & Gas Market
4.3.5.5 New Licence Round Taking Place 2013-2014
4.3.6 Mnazi Bay – Dar es Salaam Gas Pipeline to be Completed by 2015
4.3.7 Tanzanian Oil & Gas Market Summary
4.4 Mozambique Oil & Gas Market Forecast 2014-2024
4.4.1 Political and Economic Climate in Mozambique
4.4.2 Doing Business in Mozambique
4.4.3 Mozambican Production, Consumption and Reserves
4.4.5 Mozambique’s Licence Blocks and Current Activity
4.4.5.1 Great Prospects, But Also Much Uncertainty, as ENI and Anadarko Try to
Establish LNG Exports
4.4.5.2 Sasol Begins Commercial Oil Production in Mozambique; Proposes Ambitious
Investment Plan
4.4.5.3 Statoil Considering Withdrawal from Mozambique
4.4.5.4 ENRG Buys into Buzi Block
4.4.6 Sasol and Shell Both Announce Plans for GTL Projects
4.4.7 Refinery Projects Highly Unlikely to Come to Fruition
4.4.8 Pipeline Plans in Mozambique
4.4.8 Mozambican Oil & Gas Market Summary
4.5 Ugandan Oil & Gas Market Forecast 2014-2024
4.5.1 Political and Economic Climate in Uganda
4.5.2 Doing Business in Uganda
4.5.3 Ugandan Production, Consumption and Reserves
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Contents
4.5.5 Uganda’s Licence Blocks and Current Activity
4.5.5.1 Current Activity in Blocks EA1 and EA1A
4.5.5.2 Current Activity in Block EA2
4.5.5.3 Current Activity in the EA3 Production Licence
4.5.5.4 Prospects for a Refinery and Pipeline in Uganda
4.5.5.5 Prospects for Uganda’s Associated and Non-Associated Gas
4.5.6 Ugandan Oil & Gas Market Summary
4.6 Kenyan Oil & Gas Market Forecast 2014-2024
4.6.1 Political and Economic Climate in Kenya
4.6.2 Doing Business in Kenya
4.6.3 Kenyan Production, Consumption and Reserves
4.6.5 Kenya’s Licence Blocks and Current Activity
4.6.5.1 Tullow Continues with Successful Drilling Programme; Development Plan to
be Submitted Q4 2015
4.6.5.2 BG Group Makes First Offshore Oil Discovery in East Africa
4.6.5.3 Other Significant Activity in the Kenyan Exploration & Development Market
4.6.6 The Need for Oil & Gas Infrastructure Development
4.6.6.1 Kenya to Construct FSRU
4.6.6.2 Refinery Upgrade Abandoned; New Facility to be Built Instead as Part of
Lamu Port Complex
4.6.6.3 Kenya-Uganda-South Sudan Pipeline
4.6.6.4 The Mombasa-Nairobi Replacement Pipeline and the Kenya-Kampala Pipeline
4.6.7 Kenyan Oil & Gas Market Summary
4.7 South Sudanese Oil & Gas Market Forecast 2014-2024
4.7.1 Political and Economic Climate in South Sudan
4.7.2 Doing Business in South Sudan
4.7.3 South Sudanese Production, Consumption and Reserves
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Contents
4.7.5 South Sudan’s Licence Blocks and Current Activity
4.7.6 The Impact of the Ongoing Civil War in South Sudan
4.7.7 Two Small Refineries to Come into Operation Once the Security Situation Improves
4.7.8 Potential Pipeline to Kenya
4.7.9 South Sudanese Oil & Gas Market Summary
4.8 South Sudanese Oil & Gas Market Forecast 2014-2024
4.8.1 Political and Economic Climate in Ethiopia
4.8.2 Doing Business in Ethiopia
4.8.3 Ethiopian Production, Consumption and Reserves
4.8.5 Ethiopia’s Licence Blocks and Current Activity
4.8.5.1 Tullow and Partners Drill Fourth Well in Ethiopia; Suspend Activities
4.8.5.2 Southwest Energy Undertaking Drilling Campaign
4.8.5.3 New Age Find Oil & Gas in Block 8
4.8.5.4 Pexco Exploration Terminates Contract After Failure to Drill a Well
4.8.6 Ethiopian Oil & Gas Market Summary
4.9 Somali (Including Somaliland and Puntland) Oil & Gas Market Forecast 2014-2024
4.9.1 Political and Economic Climate in Somalia
4.9.2 Al-Shabab and the Somali Security Situation
4.9.3 Somalia’s Licence Blocks and Current Activity
4.9.3.1 Soma Oil & Gas Conducting Seismic Survey
4.9.3.2 Shell and ExxonMobil to Return to Somalia?
4.9.3.3 Somaliland and Puntland’s Hydrocarbons Potential
4.9.3.4 Companies Begin to Enter Somaliland
4.9.3.5 Horn Petroleum’s Activities in Puntland
4.9.4 Somali Oil & Gas Market Summary
5. PEST Analysis of the East African Oil & Gas Market 2014-2024
6. Expert Opinion
6.1 Premier Oil
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Contents
6.1.1 Premier Oil’s Involvement in the East African Oil & Gas Market
6.1.2 Premier Oil’s Plans in Kenya
6.1.3 Oil Prospects in Kenya and Uganda
6.1.4 Commercial Production and the Need for a Pipeline
6.1.5 Security Concerns in East Africa
6.1.6 Ophir Energy’s Merger Proposal
6.1.7 Opportunities, but Uncertainty in East Africa
7. Leading Companies in the East African Oil & Gas Market
7.1 Afren
7.2 Africa Oil
7.3 Anadarko
7.4 BG Group
7.5 CNOOC
7.6 ENI
7.7 Ophir Energy
7.8 Sasol
7.9 Statoil
7.10 Total
7.11 Tullow Oil
7.12 Other Companies in the East African Oil & Gas Market
8. Conclusions & Recommendations
8.1East Africa Oil & Gas Market Outlook
8.2 Key Findings in the East African Oil & Gas Market
8.3 Recommendations for the East African Oil & Gas Market
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East African Oil & Gas Market 2014-2024: Upstream
& Midstream Spending in Tanzania, Mozambique,
Figure 4.27 South Sudanese Licence Blocks
Source: USAID 2001
Table 4.30 South Sudanese Licence Blocks (Operator, Block, Exploration/Production,
Other Companies, Status)
Page 118
4. 7.5 South Sudan’s Licence Blocks and Current Activity
Figure 4.27 and Table 4.30 provide information on South Sudan’s current licence blocks.
Operator Block Exploration/
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Production Other Companies
Greater Pioneer
Operating
Company
(GPOC)
Block 1, 2, 4 Production GPOC is composed of CNPC (40%), Petronas (30%),
ONGC/OVL (25%) and Nilepet/NGPC (5%)
DAR Petroleum
Operating
Company Ltd
Block 3, 7 Production DAR Petroleum is composed of CNPC , Petronas,
Nilepet, Sinopec and Tri-Ocean Energy
Sudd Petroleum
Operating
Company Ltd
Block 5a Production Nilepet (50%) Petronas (50%)
Star Petroleum Block 5b Exploration Nilepet
Total Block B Exploration Nilepet
Star Petroleum Block E Exploration Nilepet
Source: Visiongain 2014

4. 9 The Somali (Including Somaliland and Puntland) Oil & Gas Market
Forecast 2014-2024
Table 4.38, Figures 4.30 and 4.31 show visiongain’s forecast for the Somali oil & gas market over
the next ten years.
Table 4.38 Somali Oil & Gas Market Forecast 2014-2024: Upstream E&D and
Midstream Capex ($m, AGR%, CAGR%, Cumulative)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-24
Upstream E&D 5 5 20 25 33 45 55 75 100 105 113 123 698
AGR (%) 0.0 300.0 25.0 30.0 38.5 22.2 36.4 33.3 5.0 7.1 8.9
Midstream 0 0 0 0 0 0 0 0 0 0 0 0 0
AGR (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total 5 5 20 25 33 45 55 75 100 105 113 123 698
AGR (%) 0.0 300.0 25.0 30.0 38.5 22.2 36.4 33.3 5.0 7.1 8.9
Page 133
140
120
100
80
60
40
20
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2019-24 17.4
37.7
CAGR (%) 2014-19 61.5
CAGR (%) 2014-24
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
$m
Upstream E&D Midstream
Figure 4.30 Somali Oil & Gas Market Forecast 2014-2024: Upstream E&D and
Midstream Capex ($m)

6 . Expert Opinion
6.1 Premier Oil
Andrew Lodge is Exploration Director at Premier Oil, a UK-based independent E&P company with
operations in the North Sea, Asia, Africa and the Middle East. Visiongain interviewed Mr Lodge in
August 2014 and would like to thank him for his valuable insight.
6.1.1 Premier Oil’s Involvement in the East African Oil & Gas Market
Visiongain: Can you tell me a little bit about Premier Oil and your role in the East African oil & gas
market?
Andrew Lodge: Premier Oil is an E&P company; a FTSE 250 company. Our historic exploration
successes have occurred in geological provinces called rift basins. East Africa is essentially a rift
margin and is thus something that has attracted our attention over a number of years and we have
invested in a number of opportunities. At present we are only in one location, which is Block 2B in
Kenya. We are hoping to build our position in East Africa, exploration-led.
6.1.2 Premier Oil’s Plans in Kenya
Visiongain: It suggests on you website that you have now acquired 2D seismic in Block 2B in
Kenya and are planning an exploration well for late 2014 / early 2015. Are you still on course to
meet this goal?
Andrew Lodge: Our operator [Taipan Resources] has acquired those and done that, and subject
to rig availability we are on course. We expect to spud the well sometime between November 2014
and February 2015.
Visiongain: Premier withdrew from its share in Blocks L-10A and L-10B, which are operated by
BG Group, a few months before the Sunbird-1 well was drilled, discovering an oil column offshore
Kenya. Why did you decide to withdraw from these Blocks?
Andrew Lodge: We decided that for the cost of the well and the size of the prize, when we put
together our own internal metrics for investment, it didn’t cut it. Part of our business model is
capital discipline, so if it doesn’t meet our metrics then we don’t do it. Obviously other companies
have different metrics.
Page 143
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Table 7.1 Afren’s East African Licence Blocks (Country, Operator, Block, Onshore /
Offshore, Other Companies, Status)
Page 148
Country Operator Block Onshore /
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Offshore km2 Other
Companies Status
Kenya Afren 1 Onshore 31,781 Taipan
Resources
Further 2D
seismic being
acquired in
preparation for
first well
Kenya Afren L-17 Offshore -
Seismic work
being
undertaking in
preparation for
first well in 2015
Kenya Afren L-18 Offshore -
Seismic work
being
undertaking in
preparation for
first well in 2015
Tanzania Afren Tanga Offshore 8,000 Petrodel
Chungwa-1 and
Mkonge-1 wells
drilled in 2014
Ethiopia New Age 7, 8 23,162 Afren, Africa Oil
Exploration
drilling in 2013,
result showing
oil & gas
7.2 Africa Oil
Africa Oil is the operator of two blocks in Ethiopia and one in Kenya, while also having a minority
share in a further six blocks across the two countries. The company also has a 44.7% stake in
Horn Petroleum, which operates in Puntland.
Kenya
In Kenya, Africa Oil has a minority share in Tullow’s Blocks 10BA, 10BB, 12 A and 13T (for more
information on these see section 7.10 below). In Block 9, which Africa Oil operates, the company
recently drilled the Sala-1 well to a depth of 3,030 metres, with gas being found. The drilling of the
well fulfilled the requirements of the PSC, which expires in December 2015.
Ethiopia
In March 2014 Africa Oil farmed down its share in two Ethiopian blocks, with Marathon Oil
acquiring a 50% stake in the Rift Basin Area, while New Age acquired an additional 40% working

East African Oil & Gas Market 2014-2024

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East African Oil & Gas Market 2014-2024