Oil and Gas
The announcement of oil discovery in Kenya after exploratory drilling by Anglo-Irish firm Tullow Oil is expected to spark off scramble for oil blocks in the country and the rest of East Africa. Early this year, New York Stock Exchange listed independent oil firm, Camac announced it had acquired a 90 per cent stake in three oil blocks in Kenya.
Also the discovery of oil reserves in the Lake Albert region of Uganda in July 2009 heated up the scramble for Ugandan oil. Tullow Oil Plc has indicated it will start oil production in Uganda this year. The explorer expects to increase its US$800 million spent so far on oil exploration in Uganda to about US$10 billion in the next ten years. The oil reserves in Uganda could catapult the country to the list of top 50 biggest oil producers in the world.
In neighboring Tanzania, oil and gas explorer Jacka Resources Ltd has shown interest in exploration in Ruhuhu Basin in South West Tanzania and expects to begin work by mid-2012. This cements Tanzania’s potential as a gas and oil exploration hot spot especially following the 2011 discoveries of offshore gas by an Ophir Energy-led Joint Venture. The BG Group and the Ophir Energy venture recently announced it had discovered 55 per cent more gas than earlier estimated.
Even with the many discoveries, there are still more exploration opportunities in the region. Ophir Energy Plc has said it will be drilling three exploratory wells on blocks in Tanzania and Kenya while Uganda is also expected to auction 4 oil blocks next year. Tanzania, which currently has an estimated 10 trillion cubic feet of natural gas, will begin issuing licenses for oil exploration in 16 offshore blocks. Kenya is reviewing its Petroleum Exploration and Production Act, which is expected to promote exploration of petroleum resources.
Mining
East Africa has not always been a mining hot spot. However, the tide have changed the last few years. Other than oil, the region also boasts of other mineral resources like gemstones, gold, coal, iron, diamonds, limestone, flouspar, and natural gas.
In Rwanda, tin, tantalum and tungsten deposits abound. Rutongo Mines Ltd, which is the country’s biggest miner of the tin ore cassiterite, and Wolfram Mining & Processing Ltd, a Kigali-based miner of tungsten are amongst the biggest players.
Base Resources Limited is also a major player, with its US 256 US million investment in extracting titanium deposits in Kwale, along Kenya’s coastline. Cortec Mining Kenya Company 250 million US dollars investment in the sector also makes it a Vassal in the sector.
Goldpat Plc is one of several multinationals that have shown interest in gold deposits in Kenya. The firm which was last year issued a 21-year mining lease is projecting making production of 10,000oz/y and scaling this later to 500,000oz. Other firms pursuing extraction of gold in various areas across Kenya include Red Rock Resources, Linear Metals, Afri-All Company Aviva Mining and Abba Mining.
Also, Canadian-based rare earths miner Pacific Wildcat Resources Corp is expected to begin drilling high grade rare earths deposits in Kiruku Hill in coastal Kenya. Just as the appetite of investors keeps soaring so has their expectation on return on investment. For instance, Kenya’s cement manufacturer Athi River Mining Limited is projecting a 30 percent sales and profit growth for 2012. The firm is planning to also begin operations in Tanzania by June with expected production of 2,500 tonnes cement per day.
To be continued next week…
