Regional Coordination Needed for East African Oil Investment

Over the past decade, rising energy prices and new techniques and technologies have allowed global energy companies to bring online new oil and gas reserves in East African countries, including Tanzania and Mozambique. But as the demand for fossil fuels grows among energy-hungry emerging economies, investors are also opening up production in previously unexplored areas. And in East Africa, this means major opportunity as well as major uncertainty.

“What could really make a difference is if these countries coordinate their strategies and their resources effectively,” said Richard Downie, deputy director of the Africa program at the Center for Strategic and International Studies. Downie explained that by pooling resources, East African countries could minimize risks and maximize gains. “There is the scope for some kind of regional pipeline or even regional refinery,” he added.

Most analysts have doubted whether South Sudan’s plan to build a pipeline connecting its oil fields to the coast, to take one example, would be economically viable. But Downie pointed out that if East African countries such as Kenya “continue to have significant oil discoveries, that suddenly changes the picture and makes the deal a lot more attractive.”

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