East African coast and the Horn may be next great oil province

Sep 28, 2005 02:00 AM

A top geologist says that East Africa is the most significant potential oilfield world-wide. Tom Windle, who explored some of Africa's west coast sites for Amoco, believes Africa's potential has barely been recognised. He says that although there are prospects for further oilfields in West Africa, it was in the East and the Horn of Africa where the potential is the greatest.
"If you really want to know where I think the future of Africa is, it's the east coast," he told. "If someone came to me and said, 'Here's a billion dollars, I want you to open up a new frontier basin,' I would say, 'Right, the East African margin; In my opinion the East African margin (from Sudan, through Ethiopia and Somalia down to Kenya) will be the next great oil province."

It's a view shared by Stewart Williams, the consultant from Wood Mackenzie who said that East Africa is now "emerging" after years of being ignored. Big companies are now attempting to "book reserves" in the region under the most favourable termsthey can and they have found willing takers in East African governments, anxious to see investment as well as hopeful that any new oil deposits will bring huge economic benefits.
A number of companies are now involved in exploring the possibility of oil finds in East Africa including ExxonMobil, Woodside Petroleum and Tullow Oil, which earlier this month recorded a 660 % increase in its profits for the first half of 2005. The British company has invested in trying to explore four potential oil fields in Uganda.

Tullow Oil chief executive Aidan Heavey put his firm's exceptional performance down both to the increase in oil prices and its strategy of investing heavily in potential new oilfields in Africa and Asia. The company has already seen considerable success with its African venture after interesting discoveries in Gabon and, despite the fact that no oil wells have been drilled in Uganda since the 1940s, is hopeful that its four licences agreed with Kampala -- three of which are new -- will bear fruit.
Mr Heavey said that the outlook for the rest of the year for the company remained "exciting" with "high impact" exploration wells planned for both Uganda and Mauritania.

The company has also decided that as a result of its success it will stick to the current strategy of deals and exploration rather than involvement in refineries.
"You've got to know what you are good at and stick to it," Mr Heavey told. Tullow has doubled in size thanks to its purchase of Energy Africa last year.
Africa currently produces around 11 % of the world's oil and over 5 % of natural gas. It is home to nearly 10 % of proven world oil reserves totalling some 112 bn barrels.

Source: The East African
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