East Africa to become major energy provider by 2025

Paul Snell is managing editor at Supply Management
17 November 2014

East Africa will produce an extra one million barrels of oil per day by 2025 as the region becomes a “world class player” in the energy market, it has been predicted.

According to IHS Energy, the past five years have seen major discoveries of gas and oil in the region – with Mozambique and Tanzania leading the way – and more to be located in places such as Ethiopia and Comoros.

The research firm said this has a huge potential to boost growth in the region, but the hazards of a risky operating environment with little infrastructure or regulation will present challenges.

“Gas and LNG production will become a dominant revenue generator in East Africa. 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,” said Natznet Tesfay, head of Africa at IHS Country Risk.

“The massive investment followed by the infrastructure boom will transform the northern Mozambican provinces, allowing the local governments to get involved. We expect that this will facilitate and attract the entry of foreign investors, exploring not only the opportunities in the energy sector, but also other areas, such as chemical, power, manufacturing and mining. The transformation of East Africa, however, will set its own pace.”

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