Political upheavals could affect Kenya’s oil exploration, says report

By on October 15, 2014 in Conflict, Oil & Gas, Politics, Upstream with 0 Comments

Political upheavals blamed for violent flare-ups in Kenya could be a major hindrance to the emerging multi-billion-shilling oil and gas exploration activities, a market research firm has said.

Engineer at Well 2

In an eight-page report, the UK-based firm Research and Markets says the future looks extremely bright especially after “commercial recoverable reserves” of nearly 1 billion barrels were discovered in the mainly arid northern parts of Kenya.

“Ten years ago, East Africa was not a major oil and gas exploration basin despite drilling activity dating back to 1960.

“This resource potential offers East Africans a reason to be upbeat about potential economic growth over the next half-century, but significant challenges remain,” it said.


The report said if the government expects to speed up exploration activities then it must establish a competitive business environment governed by a stable and robust regulatory framework that encourages and protects foreign investment.

Kenya has experienced terror attacks and ethnically charged tensions that have harmed the country’s image abroad, making foreign companies involved in the exploration to engage private security.

Interestingly, the ongoing scenario has also created a ready market for armoured vehicles especially by affluent businesspeople and visiting diplomats going around the country to inspect various projects or to see wild animals.

The ongoing activities in northern Kenya, in the Coastal basin and in the Nyanza region have seen notable economic activities sprout around the exploration areas, bringing in the much needed revenue directly to residents and to county governments.


The report added that positive findings across various regions, coupled with formulation of gas and oil legislative frameworks, have also excited multinational oil firms from across the world.

It seeks to explain why Kenya and the East African region’s location offers a distinct alternative to the better-known West African Basin now battling the Ebola scourge.

Researchandmarkets.com says that developing these resources could radically transform East African economies if handled well and governments invest heavily in improving infrastructure, notably electricity supply and the tarmacking of roads.

While Uganda and Kenya are estimated to have commercially recoverable reserves of 1 billion barrels of crude oil, Tanzania and Mozambique have 130 trillion cubic feet of natural gas currently under exploration.

Exploration activities are now spreading to Somalia, Ethiopia, Madagascar, Comoros, Seychelles and Mauritius.

By James Kariuki

Source: The Daily Nation

About the Author

About the Author: Eugene Obiero is the founder of The Africa Resources Post and its predecessor The East African Energy Blog. Eugene has been writing and blogging on energy and extractives in Africa since June 2012. He is based in Nairobi, Kenya and works for Camco Clean Energy (http://www.camcocleanenergy.com/ ) as Senior Manager Africa Projects. He specializes in market entry strategy, research, financial advisory and project management. Eugene has an MBA from The Warwick Business School, University of Warwick (UK). The posts on this blogsite are Eugene's and do not necessary reflect the thinking of his employer, Camco Clean Energy. .


If you enjoyed this article, subscribe now to receive more just like it.

Post a Comment

Your email address will not be published. Required fields are marked *