The  EAC Petroleum Sector

Overview

The Oil and Gas industry development in the East African Community has seen new frontier open up in the last 10 years. Through advanced geophysical exploration in Burundi, there is a likelihood of harnessing substantial oil in Lake Tanganyika and Rusizi river plan. However, currently, Burundi’s refined oil products are imported from neighbouring Kenya and Tanzania in the neighbouring country-Rwanda, the potential for the hydrocarbon resource lies in the North-Western part of the country and some parts of Lake Kivu.  Tanzania has made substantial gas discoveries on the coastal shores of Songo Island and Mnazi Bay. Commercial exploitation for power generation began in July 2004.  Similarly, in Uganda, Oil’s discovery was finally made in Western Uganda in 2006 after 17 years of exploration.

Kenya

The petroleum sector in Kenya is organised into three areas: the upstream, midstream and downstream.
  • Upstream Petroleum
Kenya has four (4) petroleum exploration basins: Lamu Basin, Anza Basin, Mandera Basin and Tertiary Rift Basin. Oil and gas exploration in the country began in 1956, and the breakthrough came in March 2012 with the discovery well –Ngamia 1 Well, in Lokichar Basin in Turkana County. As at December 2015, seventy-four (74) wells had been drilled with twelve (12) hydrocarbon discoveries to date, nine (9) of which are in Turkana County. The other three are in Anza Basin and Offshore Lamu.
  • Midstream Petroleum
Petroleum is one of the prime movers of the country’s social and economic development. Petroleum products are predominantly used in transport, commercial and industrial sectors. Kenya imports all its petroleum products requirements. The Ministry coordinates this activity with oil marketing companies through a process known as an Open Tender System. The Kenya Pipeline Company provides product movement infrastructure, including storage and oil pipeline services.
  • Downstream Petroleum
Oil marketing companies do distribution and Marketing of petroleum products. The National Oil Corporation of Kenya (NOCK) is the state body engaged in this area. It is also involved in upstream activities.

Uganda

Uganda’s Petroleum sector is also organised into the upstream, midstream and downstream subsectors.
  • Upstream.
The earliest reference to oil in Uganda was about an oil seepage near Kibiro on Lake Albert’s shores. The first contribution to evaluating the country’s hydrocarbon potential was E. J Wayland, a Government geologist, who documented numerous hydrocarbon occurrences in the Albertine Graben in the 1920s.
Uganda’s confirmed petroleum resource base is currently estimated at 6.5 billion barrels of Stock Tank Oil-Initially-In-Place (STOIIP). Of this, between 1.4 to 1.7 billion barrels are estimated to be recoverable.
  • Midstream
UNOC’s two wholly-owned subsidiaries drive the midstream sector; Uganda Refinery Holding Company Limited (URHC) and National Pipeline Company Limited (NPC).
  • Downstream
UNOC currently manages the downstream subsector. The portfolio includes management and operation of 30 million litre capacity Jinja Storage Terminal (JST) in eastern Uganda. There is also planned project underway to develop a 240 million litre capacity Kampala Storage Terminal (KST) at North-West of Kampala.

Rwanda

Rwanda has carried out major geophysical and geological surveys in the Lake Kivu region. So far, the country already extracts methane from Lake Kivu, which borders Lake Albert. Like other countries, Rwanda’s Policy has three elements: an upstream component, currently concerned with exploration for possible petroleum resources; the midstream component that deals with infrastructures such as pipelines, depots, and the downstream part related to the importation of refined products.

Tanzania

The Petroleum sector in Tanzania has three elements: the upstream industry, midstream and downstream. The upstream component focusses on oil and gas exploration and production.  So far large deposits of gas fields have been identified off the coast at Songo Songo, and Mnazi Bay and these are in the process of being developed. Current natural gas reserves are estimated to be 2 trillion cubic feet (tcf). The midstream is highly regulated in Tanzania, specifically, pipeline components. For example, before you build a pipeline, you should get all people’s permits and agreements affected by it. The primary modes of transport include trucking and pipeline.
 crude, petroleum products and natural gas pipelines :
  •  Songa Songa Pipeline
This is a 207-kilometre-long pipeline that transports natural gas from the Songo Songo gas field in Lind region to Dar es Salaam.
  • Mtwara-Dar es Salaam Pipeline
The second pipeline is 532km long that pump natural gas from Mnazi Bay gas field in Mtwara to Dar es Salaam.
  •  Tazama-Zambia Pipeline
The pipeline is 1710 kilometre in length that transport petroleum feedstock from Dar e Salaam in Tanzania to Ndola, Zambia.

Burundi

Burundi has no local oil or natural gas sources, and neither are there any facilities for oil refining.  However, ongoing studies to explore the potential for hydrocarbons along Lake Tanganyika and Rusizi river indicate some potential for hydrocarbons in the region. Petroleum products are mostly used in industry, power generation in thermal plants and for transportation.

South Sudan

South Sudan contains the third-largest oil reserves in sub-Saharan Africa after Angola and Nigeria, estimated at 3.5 billion barrels. These reserves are found throughout the country, especially in the north, where oil production is concentrated. Currently, production levels stood at over 186,000 barrels per day (bpd).  The two main production areas include Blocks 3 and 7 in Great Upper Nile, operated by Dar Petroleum Operating Company; Blocks 1, 2 and 4 which produces around 52,000 bpd but is projected to be approximately 60,000 bpd. The Ministry of Petroleum has set an ambitious target of 350,000 to 400,000 bpd by the end of 2025.

Petroleum Statistics