The market for the East Africa’s oil and gas upstream market is expected to grow at a CAGR of more than 3 % during the forecast period of 2020 – 2025. Factors such as increasing production and consumption of oil and gas in the country are expected to boost the demand for the East Africa oil and gas upstream market during the forecast period. However, instability in countries of East Africa like South Sudan and Somalia have impeded growth in the oil and gas sector.

  • The offshore segment is expected to witness significant growth in the forecast period due to heavy investments being made in offshore oil and gas projects, especially in Mozambique and Tanzania.
  • In 2019, a new oil field was discovered by South Sudan in the Adar area of Northern Upper Nile State that is expected to contain 5.3 million barrels of recoverable crude. More such exploration projects all over the region are expected to act as an opportunity for the market players.
  • Mozambique’s upstream sector is expected to witness significant growth in the forecast period due the exploration and production of oil and gas in its Exclusive economic zone (EEZ) in the Indian Ocean.



Key Market Trends

Offshore to be the Fastest Growing Segment

  • In East Africa, oil consumption increased by 2.9% to 30.7 million tons of oil equivalent (Mtoe) in 2018 from 29.8 Mtoe in 2017. Increasing demand for oil and rising purchasing power of the citizens in the region is boosting the market’s growth.
  • Tanzania could be preparing for another licensing round of its offshore oil and gas blocks in the second quarter of 2019, more than four years after the last auction did not yield the anticipated results on the back of the country’s complex regulatory regime. However, changes have been made in the regulatory mechanism, which may yield positive results.
  • In 2019, Qatar Petroleum, a State-owned company of Qatar, has acquired a block of Kenya’s offshore oil and gas exploration fields, adding to a growing list of global corporations seeking to exploit vast fuel deposits believed to be underneath the Indian Ocean seabed.
  • The offshore oil and gas sector is expected to grow due to the rising investments in the industry and an increase in the production of oil and natural gas.



Mozambique Upstream to Witness Growth

  • In East Africa, there has been an increase in natural gas consumption by 7.5%. Increasing to 1.9 million tons of oil equivalent (Mtoe) in 2018 from 1.7 Mtoe in 2017. The consumption is expected to increase in the forecast period as the countries become more prosperous.
  • In 2018, The Mozambique government approved the development plan for the Golfinho-Atum natural gas field in the Area 1 block located in the Rovuma Offshore Basin of Mozambique. More blocks for exploration and production are being approved in the country.
  • Eni, through its subsidiary Eni Mozambico, has acquired rights to explore and develop offshore blocks A5-B, Z5-C, and Z5-D, located in the deep waters of Angoche and Zambezi Basins. Most of the country’s oil and gas are extracted by offshore drilling, as a large amount of Mozambique’s oil and gas reserves are situated in the Indian Ocean.
  • Mozambique’s oil and gas industry is expected to grow slightly in the forecast period due to an increase in oil and gas production in the region and increasing investment in the sector.



Competitive Landscape

The East Africa oil and gas upstream market is moderately consolidated. Some of the major companies include the National Oil Corporation of Kenya, Equinor ASA, Exxon Mobil Corporation, PanAfrican Energy Tanzania Ltd, and China National Petroleum Corporation.

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