Seven Trends That Will Shape East African Oil and Gas Industry In 2020 And Beyond
There have been some significant oil and gas discoveries across East Africa, primarily in Mozambique, Tanzania, Kenya, and Uganda and have propelled East Africa from the minor league to a global leader in hydrocarbon discoveries for the running ten years.
But the simple truth is that, the East African oil and gas industry has changed in the last few years. And understanding these changes is crucial for redirecting your business to match the new reality.
Here are six trends in the East African oil and gas industry worth watching this year and throughout the decade.
Number One: Competitive Regulatory Reforms
With oil prices being low for a while, everyone is competing for investment.
In 2020, you are going to see East African countries are continuing to review their regulatory frameworks to ensure they serve domestic development priorities, remain attractive to investors. And ensure a faster-approved permit in your hand so you keep your drilling rig moving and your project on track.
Number two: Oil and Gas Skills Shortage
Even as oil prices began to recover in 2017 and 2018, the industry remained focused and now place a huge premium on productivity, innovation and high performance of the workforce. And that is expected to continue in 2020 and beyond
The key shortage in East African oil and gas is one of the qualified personnel with skills and expertise to deliver productivity and high performance needed.
There are simply not enough skills and expertise to supply all the demand. You will not be able to hire skills quickly enough or insufficient volume to deliver the innovation and high performance required
However, the following technological advances in the oil and gas, training your youth team and experienced workers is the answer.
The challenges and opportunities in East African oil and gas industries can be addressed developing local experiences. We have seen what happened during the oil price slump of 2014 to 2016. Neither finance nor the technology is saving the industry. But the people, their performance and their productivity have been addressed both challenges and opportunities
Number three: Enhanced regional co-operation
East Africa has realized that collaboration is their future. They understand if they want to maintain future business, they have to collaborate. You have seen what happened in East Africa since 2016. Uganda and Tanzania are planning to build a 1445 kilometer pipeline that will transport crude oil from Hoima in Uganda to Tanga port in Tanzania. A plan to export Tanzanian gas to Kenya is also being explored.
Number four: Growth of East African Content
Following the successful implementation of oil and gas projects, it’s encouraging to see now, East African operators are moving forward, to replicate the success of these projects elsewhere in Africa.
For example, Canada based company, Orca exploration which operates the Songo Songo gas field in Tanzania under its subsidiary, Pan African energy Tanzania (PAET) is seeking to expand Company’s Integrated Gas Business elsewhere in Africa. As the East African region to strengthen its local content. This trend will accelerate in 2020 and beyond
Number Five: Expect High Gas Demand
East Africa’s gas demand is expected to grow in the coming years. This is driven by increasing industrialization and power demand in the region. In its latest operational update released on January 28, Pan African energy operators of the Songo Songo gas field see the Tanzanian gas demand rising this year and beyond.
This is driven by the expansion of gas-fired power generation, industrial users and expected start dates for new gas-fired generation.
Number Six: Technology Transformation to drive efficiency
Oil and gas companies are adopting new technology to lower cost, increase productivity and improve operational efficiency. An increased use of measurement-while-drilling (MWD) and logging-while-drilling (LWD) tools which collect data during the drilling process could improve drilling accuracy.
In addition to that, following the latest technology in geophysical services (also known as seismic and data acquisition) such as pre-stack depth migration algorithm like Kirchhoff, Beam, Kirchhoff least square migration or RTM (Reversed Time Migration) could help increasing the East African reserves volumetric calculations.
Developing and training the users of these up-to-dated technology in the industry is the best way to save time in saving money in the East African oil and gas industry.
Number Seven: Downstream market is going to be a huge market for everyone: As the upstream sub sector of the oil and gas industry is recovering gradually from a major slump of 2024 to 2016. The downstream petroleum products sub sector of the oil and gas industry, which cover everything from lubricants, liquefied petroleum gas (LPG), diesel, jet fuel is growing at a rapid pace in East Africa. The demand is driven by continued economic growth in the region. The downstream petroleum products sub sector is expected to remain stable over the next decade to come.
By Hussein Boffu
+255655376543/Hussein.boffu@tanzaniapetroleum.com
