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East African Oil & Gas Market
2015-2025
Upstream Exploration & Development and Midstream Infrastructure
Capex in Tanzania, Mozambique, Kenya, Uganda, with Special Focus
on Rapidly Emerging Countries Ethiopia, South Sudan & Somalia

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Contents
1. Report Overview
1.1 East African Oil & Gas Market Overview
1.2 East African Oil & Gas Market Structure
1.3 Why You Should Read This Report
1.4 How This Report Delivers
1.5 Key Questions Covered by This Analytical Report Include
1.6 Who is This Report For?
1.7 Market Definition
1.8 Methodology
1.9 Frequently Asked Questions (FAQs)
1.10 Associated Visiongain Reports
1.11 About Visiongain
2. Introduction to the East African Oil & Gas Market
2.1 Critical Issues in the East African Oil and Gas Market
2.1.1 Political (In)Stability
2.1.2 Economic and Energy Sector Development
2.2 Oil Price Collapse Analysis and Forecast
2.2.1 Visiongain’s Description and Analysis of the Oil Price Collapse
2.2.2 Known Unknowns and Major Variables that Impact the Oil Price
2.2.3 Visiongain’s Oil Price Assumptions and Forecast
3. The East African Oil & Gas Market
3.1 East African Oil & Gas Market Forecast 2015-2025
3.2 East African Oil & Gas Submarket Forecast
3.2.1 East African Upstream Exploration & Development (E&D) Market Forecast 2015-2025
3.2.2 East African Midstream Market Forecast 2015-2025

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Contents
4. The Tanzanian Oil and Gas Market
4.1 Tanzanian Oil & Gas Markets Forecast 2015-2025
4.2 Background
4.3 Economy and Energy Sector Development
4.3.1 Infrastructure
4.3.2 Energy Supply
4.3.3 Labour Force
4.3.4 Changes to Legislation
4.4 Political Risk Assessment
4.4.1 Strengths
4.4.2 Weaknesses
4.4.3 Opportunities
4.4.4 Threats
4.4.5 Verdict
4.5 Tanzanian Production, Consumption and Reserves
4.6 Oil and Gas Sector Organisation
4.7 Tanzania’s License Blocks and Current Activity
4.7.1 BG Group and Ophir Energy in Blocks 1, 3 and 4
4.7.2 Statoil and ExxonMobil in Block 2
4.7.3 Shell’s Acquisition of BG Group in 2015
4.7.4 Plans for an LNG Terminal
4.7.5 Mnazi Bay – Dar es Salaam Gas Pipeline Completed in 2015
4.8 Tanzanian Oil & Gas Market Summary
5. The Mozambican Oil and Gas Market
5.1 Mozambican Oil & Gas Markets Forecast 2015-2025
5.2 Background
5.3 Economy and Energy Sector Development
5.3.1 Infrastructure

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Contents
5.3.2 Labour Force
5.3.3 Bi-lateral Trade Partnerships
5.3.4 Unqualified Government and Public Sector
5.3.5 Demographics
5.3.6 New Petroleum Law 2014
5.4 Political Risk Assessment
5.4.1 Strengths
5.4.2 Weaknesses
5.4.3 Opportunities
5.4.4 Threats
5.4.5 Verdict
5.5 Mozambican Production, Consumption and Reserves
5.6 Oil and Gas Sector Organisation
5.7 Mozambique’s License Blocks and Current Activity
5.7.1 Great Prospects, But Also Much Uncertainty, as ENI and Anadarko Try to Establish LNG
Exports
5.7.2 Sasol Begins Commercial Oil Production in Mozambique; Proposes Ambitious
Investment Plan
5.7.3 Statoil Withdraws from Mozambique
5.7.4 ENRG Buys into the Buzi Block
5.7.5 Refinery Projects Highly Unlikely to Come to Fruition
5.7.6 Pipeline Plans in Mozambique
5.8 Mozambican Oil & Gas Market Summary
6. The Kenyan Oil and Gas Market
6.1 Kenyan Oil & Gas Markets Forecast 2015-2025
6.2 Background
6.3 Economy and Energy Sector Development
6.3.1 Unemployment
6.3.2 Infrastructure

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Contents
6.3.3 Financial Sector
6.3.4 Tax Regime
6.4 Political Risk Assessment
6.4.1 Strengths
6.4.2 Weaknesses
6.4.3 Opportunities
6.4.4 Threats
6.4.5 Verdict
6.5 Kenyan Production, Consumption and Reserves
6.6 Oil and Gas Sector Organisation
6.7 Kenya’s License Blocks and Current Activity
6.7.1 Tullow Continues with Successful Drilling Programme
6.7.2 BG Group Makes First Offshore Oil Discovery in East Africa
6.7.3 Other Significant Activity in the Kenyan Exploration & Development Market
6.7.4 The Need for Oil & Gas Infrastructure Development
6.7.5 Kenya to Construct FSRU
6.7.6 Refinery Upgrade Abandoned; New Facility to be Built Instead as Part of Lamu Port
Complex
6.7.7 Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSETT)
6.7.8 The Mombasa-Nairobi Replacement Pipeline and the Kenya-Kampala Pipeline
6.8 Kenyan Oil & Gas Market Summary
7. The Ugandan Oil and Gas Market
7.1 Ugandan Oil & Gas Markets Forecast 2015-2025
7.2 Background
7.3 Economy and Energy Sector Development
7.3.1 Oil Industry Development
7.3.2 Infrastructure
7.4 Political Risk Assessment
7.4.1 Strengths

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Contents
7.4.2 Weaknesses
7.4.3 Opportunities
7.4.4 Threats
7.4.5 Verdict
7.5 Ugandan Production, Consumption and Reserves
7.6 Oil and Gas Sector Organisation
7.7 Uganda’s License Blocks and Current Activity
7.7.1 Current Activity in Blocks EA1 and EA1A
7.7.2 Current Activity in Block EA2
7.7.3 Current Activity in the EA3 Production Licence
7.7.4 Prospects for a Refinery and Pipeline in Uganda
7.7.5 Prospects for Uganda’s Associated and Non-Associated Gas
7.8 Ugandan Oil & Gas Market Summary
8. The Ethiopian Oil and Gas Market
8.1 Ethiopian Oil & Gas Markets Forecast 2015-2025
8.2 Background
8.3 Economy and Energy Sector Development
8.3.1 Infrastructure
8.3.2 Bi-lateral Trade
8.4 Political Risk Assessment
8.4.1 Strengths
8.4.2 Weaknesses
8.4.3 Opportunities
8.4.4 Threats
8.4.5 Verdict
8.5 Ethiopian Production, Consumption and Reserves
8.6 Oil and Gas Sector Organisation
8.7 Ethiopia’s License Blocks and Current Activity
8.7.1 Tullow and Partners Drill Fourth Well in Ethiopia; Suspend Activities

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Contents
8.7.2 Southwest Energy Undertaking Drilling Campaign
8.7.3 New Age Find Oil & Gas in Block 8
8.7.4 Pexco Exploration Terminates Contract After Failure to Drill a Well
8.8 Ethiopian Oil & Gas Market Summary
9. The South Sudanese Oil and Gas Market
9.1 South Sudanese Oil & Gas Markets Forecast 2015-2025
9.2 Background
9.3 Economy and Energy Sector Development
9.3.1 Structurally Underdeveloped
9.3.2 Oil Dependence
9.4 Political Risk Assessment
9.4.1 Strengths
9.4.2 Weaknesses
9.4.3 Opportunities
9.4.4 Threats
9.4.5 Verdict
9.5 South Sudanese Production, Consumption and Reserves
9.6 Oil and Gas Sector Organisation
9.7 South Sudan’s License Blocks and Current Activity
9.7.1 The Impact of the Ongoing Civil War in South Sudan
9.7.2 Two Small Refineries to Come into Operation Once the Security Situation Improves
9.7.3 Potential Pipeline to Kenya
9.8 South Sudanese Oil & Gas Market Summary
10. The Somali Oil and Gas Market
10.1 Somali Oil & Gas Markets Forecast 2015-2025
10.2 Background
10.3 Economy and Energy Sector Development
10.3.1 Economic Recovery Plan

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Contents
10.3.2 Sub-national Dispute
10.4 Political Risk Assessment
10.4.1 Strengths
10.4.2 Weaknesses
10.4.3 Opportunities
10.4.4 Threats
10.4.5 Verdict
10.5 Somalia’s License Blocks and Current Activity
10.5.1 Oil Field Protection Unit
10.5.2 Soma Oil & Gas Conducting Seismic Survey
10.5.3 Shell and ExxonMobil to Return to Somalia?
10.5.4 Somaliland and Puntland’s Hydrocarbons Potential
10.5.5 Companies Begin to Enter Somaliland
10.5.6 Horn Petroleum’s Activities in Puntland
10.6 Somali Oil & Gas Market Summary
11. PEST Analysis of the East African Oil & Gas Market 2015-2025
11.1 Political
11.2 Economic
11.3 Social
11.4 Technological
12. Expert Opinion
12.1 Heritage Oil
12.1.1 Heritage Oil’s Involvement in the East African Oil & Gas Market
12.1.2 Heritage Oil’s Plans in Rukwa Basin
12.1.3 Offshore Costs
12.1.4 Expansion of the Upstream E&D Market in Tanzania
12.1.5 Heritage Oil’s Plans in the Kyela Concession

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Contents
12.1.6 Drilling Programme
12.1.7 Commercial Export Infrastructure
12.1.8 Security Concerns in East Africa
12.1.9 Impact of Oil Price Crash
12.1.10 Summary of Main Challenges
12.2 Swala Energy
12.2.1Swala Energy’s Involvement in the East African Oil & Gas Market
12.2.2 Security Concerns in East Africa
12.2.3 Opportunities, but Uncertainty in East Africa
12.3 Saladin Security
12.3.1 Saladin Security’s Involvement in the East African Oil & Gas Market
12.3.2 Personal Experience
12.3.3 Saladin Security’s Experience in Somalia
12.3.4 Offshore Potential in Somalia
12.3.5 Onshore Potential in Somalia
12.3.6 Dealings with the Somali Government
12.3.7 Kenyan-Somali Relations
12.3.8 Saladin Security’s Experience in Kenya
12.3.9 Saladin Security’s Experience in South Sudan
12.3.10 International Intervention in Somalia
12.3.11 Impact of the Oil Price Crash
12.3.12 Concluding Remarks
13. Leading Companies in the East African Oil & Gas Market
13.1 Afren
13.2 Africa Oil
13.3 Anadarko
13.4 BG Group
13.5 CNOOC
13.6 ENI

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Contents
13.7 Heritage Oil
13.8 Ophir Energy
13.9 Sasol
13.10 Statoil
13.11 Swala Energy
13.12 Total
13.13 Tullow Oil
13.14 Other Companies in the East African Oil & Gas Market
14. Conclusions & Recommendations
14.1East Africa Oil & Gas Market Outlook
14.2 Key Findings in the East African Oil & Gas Market
14.3 Recommendations for the East African Oil & Gas Market

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East African Oil & Gas Market 2015-2025: Upstream Exploration
& Development and Midstream Infrastructure Spending in Tanzania,
Mozambique, Kenya, Uganda, With Special Focus On Rapidly
Growing Countries Ethiopia, South Sudan & Somalia
The Kenyan oil and gas market will see capex of $482m in 2015. Strong development of both
onshore and offshore E&P over the next few years, along with midstream spending on pipelines, a
refinery and an FSRU will lead to a CAGR of 36.5% during the first half of the forecast period and
spending of $2,285m in 2020. Spending will drop off once commercial production has been
achieved, with a CAGR of -21.3% during the second half of the forecast period and capex of
$691m in 2025.
Kenya 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Geophysical survey 0.5 1.5 1.0 4.0 2.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
2D Seismic Survey 18.5 5.5 6.9 6.9 6.9 6.9 6.9 6.9 6.9 0.0 0.0 0.0 0.0
3D Seismic Survey 0.0 24.2 8.9 59.0 29.5 59.0 59.0 59.0 59.0 59.0 29.5 0.0 0.0
Offshore Wells and
Subsea Dev. 225.0 150.0 225.0 300.0 300.0 225.0 150.0 150.0 75.0 225.0 150.0 75.0 75.0
Onshore Wells 60.0 210.0 240.0 165.0 120.0 90.0 15.0 30.0 90.0 15.0 15.0 15.0 15.0
TOTAL 304.0 391.2 481.8 534.9 458.4 381.9 231.9 246.9 231.9 300.0 195.5 91.0 91.0
0
100
200
300
400
500
600
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Capex($m)
2D Seismic 3D Seismic Offshore well Onshore well Geophysical survey
Source: Visiongain 2015
Figure 6.2 Kenyan Oil & Gas Market Forecast 2015-2025 Upstream Capex ($m)
Table 6.2 Kenyan Oil & Gas Market Forecast 2015-2025: Upstream E&D Capex by
Project ($m, AGR%, CAGR%, Cumulative)
Source: Visiongain 2015

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East African Oil & Gas Market 2015-2025: Upstream Exploration
& Development and Midstream Infrastructure Spending in Tanzania,
Mozambique, Kenya, Uganda, With Special Focus On Rapidly
Growing Countries Ethiopia, South Sudan & Somalia
8. The Ethiopian Oil & Gas Market
8.1 The Ethiopian Oil & Gas Market Forecast 2015-2025
Tables 8.1, 8.2, 8.3 and Figures 8.1, 8.2, 8.3 and 8.4, show visiongain’s forecast for the Ethiopian
oil & gas market over the next ten years.
CAPEX ($m) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Ethiopia 81 76 47 444 451 468 446 56 71 101 159 404 432
AGR (%) -6.4 -38.3 851.6 1.5 3.8 -4.8 -87.5 27.0 42.5 57.7 154.7 6.9
2020-2025 50.7
CAGR (%) 2015-2025
CAGR (%) 2015-2020 3.6
24.9
0
50
100
150
200
250
300
350
400
450
500
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Capex($m)
Upstream E&D Midstream
Table 8.1 Ethiopian Oil & Gas Market Forecast 2015-2025: Upstream E&D and
Midstream Capex ($m, AGR%, CAGR%, Cumulative)
Figure 8.1 Ethiopian Oil & Gas Market Forecast 2015-2025: Upstream E&D and
Midstream Capex ($m)
Source: Visiongain 2015
Source: Visiongain 2015

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East African Oil & Gas Market 2015-2025: Upstream Exploration
& Development and Midstream Infrastructure Spending in Tanzania,
Mozambique, Kenya, Uganda, With Special Focus On Rapidly
Growing Countries Ethiopia, South Sudan & Somalia
12. Expert Opinion
12.1 Heritage Oil
James Baban is the Managing Director of Heritage Oil
Tanzania Ltd. Heritage Oil is an international oil exploration
and production company, with producing assets in Nigeria
and Russia and exploration assets in Tanzania, Papua New
Guinea, Ghana, Malta, Libya and Pakistan. James has over
37 years experience in the oil and gas industry, including
time spent at Petro-Canada, Burlington Resources; Veba Oil;
Deminex Oil; British Petroleum & British Gas. The main
focus of his work has revolved around the upstream and
engineering side of the oil and gas industry. James has
achieved notable success in operations in Iraq and Algeria
and is confident of similar success at the base of his current operations, in South West Tanzania.
12.1.1 Heritage Oil’s Involvement in the East African Oil & Gas Market
Visiongain: Can you tell me a little bit about Heritage Oil and its role in the East African oil & gas
market?
James Baban: Heritage Oil are 100% owners and operators of its two concessions in Tanzania,
the Rukwa Basin and the Kyela Concession. There has been no oil discovery as of yet but we
have invested in both gravity and 2D seismic surveys which have yielded very encouraging results.
The prospective acreage in the two concessions exhibit very similar geological characteristics to
those observed in the successful Ugandan field– The Kingfisher.
12.1.2 Heritage Oil’s Plans in Rukwa Basin
Visiongain: A recent interview with your Senior Geologist, Bob Downie, suggested that there are
good prospects for commercial oil development in the Lake Rukwa area. Can you expand on this
and provide any update on your stage of exploration?
James Baban: All geological and geophysical work has been completed and we’re now reaching
the stage where we can drill. The data obtained from the seismic surveys are very good and very
exciting. But, as always, the proof is in the drilling, so we really need to move on to that stage. We
are now waiting for the right moment to start the drilling – under the current programme that is next

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East African Oil & Gas Market 2015-2025: Upstream Exploration
& Development and Midstream Infrastructure Spending in Tanzania,
Mozambique, Kenya, Uganda, With Special Focus On Rapidly
Growing Countries Ethiopia, South Sudan & Somalia
ever oil discovered offshore East Africa. BG Group is in the process of analysing the well data and
will recommend a future exploration programme based on the results. The presence of oil in the
Lamu Basin offshore Kenya is an exciting proposition for a number of countries with blocks in the
region, including Afren, Anadarko, Camac Energy, FAR and Ophir Energy. The Sunbrid discovery
may lead these companies to begin their own drilling activities in the region, whilst it could also
encourage larger companies to buy interests in offshore blocks in the region.
Table 13.4 shows BG Group’s involvement in East African oil & gas blocks.
Operator Country Block
Other
Companies Status
BG
Group Tanzania 1
Ophir Energy,
Pavilion
Energy
Taachui-1 well successfully drilled in June
2014, followed by steam tests. Kamba 1
successfully drilled in 0ct 2014
BG
Group Tanzania 3
Ophir Energy,
Pavilion
Energy
First well in Block 3 encountered
commercial quantities of gas in 2013
BG
Group Tanzania 4
Ophir Energy,
Pavilion
Energy
Kamba prospect discovered significant
shows in 2014, plan to start drilling in
2016
BG
Group Kenya L-10A
PTTEP,
Pancontinental
Sunbird-1 well made offshore oil
discovery in June 2014
BG
Group Kenya L-10B Pancontinental
3D seismic acquired; drilling activity may
follow after reviewing data from Sunbird-1
well
Table 13.4 BG Group’s East African Licence Blocks (Country, Operator, Block,
Onshore / Offshore, Other Companies, Status)
Source: Visiongain 2015