London: East Africa is set to become a major oil province, according to Tullow Oil’s glowing half-yearly results, released last week in London.
Tullow announced that with promising prospects in Kenya, combined with Uganda’s already confirmed 3.5 billion barrels of oil, East Africa continued to show immense potential. Tullow says it is close to signing a memorandum of understanding on a basin commercialisation plan with the government of Uganda.
It also pointed out that more oil and gas prospects have been identified in Ethiopia and Madagascar.
“The oil industry doesn’t appreciate how important the East African basin is going to be,” said Tullow CEO Aidan Heavey, adding that in spite of the challenges of doing business in the region he would not swap his assets for anybody else’s.
“Opportunities for East Africa are just enormous,” he said.
In June, the presidents of Uganda, Kenya and Tanzania agreed on an integrated concept for oil development in the region, including the building of a joint export pipeline under the leadership of Kenya.
But even with the immense opportunities at hand, Heavey says that some of the “complexities” of doing business in East Africa pose a threat to its potential.
“It is very difficult for foreign businesses to work in Africa. Decision making is slow and there is no transparency,” he told The Observer in London.
According to Heavey, these ambiguities and bureaucracies are frustrating for businesses because they do not have accurate and reliable information to use and plan ahead.
“Government should (now) be putting together long term plans,” he said. “Government should be more transparent to take away suspicion.”
Heavey, nevertheless, insists that East Africa can dare to dream. And the region can draw from the experiences of Ghana, where the oil there has transformed the lives of ordinary Ghanaians for the better.
“There are lots of opportunities for local business people to supply us goods and services,” Heavey said of the opportunities that oil brings.
He is confident that the script will be different in East Africa because the company believes “it is our business to help local people,” and “it is (all) happening locally.”
In an interview with The Telegraph in 2009, Heavey said: “Historically, oil has been a curse in a lot of countries, especially in Africa but we work with communities, local government and local industries long before we ever start producing oil.”
At the time, Heavey predicted that the future of fuel lies in Africa. According to Heavey, “If it is done properly, this might be it for East Africa.”