Afpedia Products For Sellers For Buyers Trade Shows Industrial Cluster

Online Translation

Sign In

Join Now



The oil ambition in Uganda and Kenya will rely on pipelines

The oil ambition in Uganda and Kenya will rely on pipelines

Kenya and Uganda are developing two new basins and naturally agreed to build one line to connect the landlocked discoveries to the coast. That changed last year, when Uganda chose a more southerly 870-mile route through Tanzania, citing lower transit prices.Kenya will go it alone with an 865-kilometer line to a port on the Indian Ocean.

The Tanzanian route will get some funding help from one french oil company, which owns a stake in the Uganda reserves, but it still hasn't secured the financing it needs.

The economist at NKC African Economics Jacques Nel said "The Kenyan pipeline seemed economically viable when Ugandan oil was going to flow through it,". Mr Jacques added that With separate lines each carrying less oil than planned and global prices remaining weak, the economics " will continue to cast a shadow over the development of the sector,".

While Africa produces more than 8.4 million barrels of crude daily from major exporters like Libya and Algeria in the north and Nigeria and Angola in the west, eastern countries weren't on the world oil map. The government of  Kenya will generate revenue of $650 million a year in the late-2020s, even with crude at just $45 a barrel, said KCSPOG, a non-governmental organization.

Originally, the two nations agreed to share a pipeline running through Kenya's arid Lokichar basin to the coastal town of Lamu. But parts of the route have been prone to attacks by bandits and cattle rustlers.Another issues it's also close to Somalia, where Islamist al-Shabaab militants have waged an insurgency against the government for the past decade, as well as carrying out raids inside Kenya.

Safety was a serious concern for Paris-based Total, which in January increased its holding in the Lake Albert site. The French company agreed to help finance part of an alternative route through Tanzania that may cost about $4 billion.

Uganda government officials said that the switch was a business decision. The Kenyan route would have been "very costly," with a tariff of $15.90 a barrel, compared with $12.20 for the Tanzanian pipeline, according to Energy Minister Irene Muloni. During an interview in Kampala,the capital of Uganda, Muloni said that they took a decision which is good for their country.

The Chief Executive Officer of Tullow Paul McDade said last week that Uganda's resources could be developed at a total cost of about $20 a barrel, including capital expenditure on drilling and pipeline construction plus operating costs. The analyst for East Africa at Verisk Maplecroft, Emma Gordon said that "Along with the offer of better tariffs, Uganda argued that the Tanga pipeline would mean easier land access, better security, and would open up another important trade route,".

"Currently, the country is heavily reliant on Kenya for its trade." The decision made by Uganda  dented Kenya's ambitions to develop a $26 billion regional transport corridor, leaving explorers in the country under pressure to improve the project's viability by boosting resources.

As an authority of media industry, we can provide you integrated brand communication on your products! Reasonable advertising prices will let you enjoy great over-valued service!”
Customized Service
Customized information such as product prices, company trends, market forecasts, price curves, etc. will help you fully grasp the latest trend!
Tailor-made, in-depth, professional research reports which will explore the business opportunities is your effective decision-making reference!
Professional and accurate trade data will help you break through the export bottleneck of products, track peer dynamics, and grasp industry trends!

Buyers Suppliers

Hot Search