By Staff

Great Lakes Centre for Strategic Studies 

Oil drilling prospects in the Great Lakes region continue to make headlines. In Uganda, Heritage Oil & Gas, one of the companies exploring for oil in the western parts of the country, claims to have discovered more petroleum deposits on Kingfisher-1A well. Drilling operations on the well, located on the shores of Lake Albert in Exploration Area 3A, reportedly encountered significant amounts of hydrocarbons in three sedimentary zones totalling over 40 meters.
 This week, it was reported that the Kenyan government will spend about $2 million on a major power project in Lamu town as part of plans to establish a multimillion dollar transport hub linking Kenya with Somalia, Sudan, Djibouti and Ethiopia. The project is being seen as a government attempt to prepare for a planned massive investment that will establish a second port and a modern road and railway network.
 In another development, the Eldoret-Kampala oil pipeline extension, which had stalled due to allegations of corruption and influence-peddling, has finally been settled. It has been reported that Libyan firm Tamoil has been awarded the tender for this operation.
 A Brazilian international energy firm, Petróleo Brasileiro S/A (Petrobras), has reportedly concluded an agreement with the Tanzania government to start deepwater exploration for oil within two years. Block 6, which covers an area of 11,099 square kilometres, would be divided into three periods over 11 years. Block 6 is located in deep waters of between 500 and 3,500 meters in the Tanzanian sector of the Indian Ocean.
 GLCSS is of the view that further oil drilling and exploitation in the region will be achieved in the long run. In the short term however, the region will continue to experience oil shortages. Currently, fuel prices have been hiked in some places. In Zambia for example, prices have gone up, with petrol retail price moving from K5, 397 to K6, 095 per litre. The upward changes were largely due to trends in international oil prices and the depreciation of the kwacha against the dollar.
 The scarcity of oil supplies and the energy crisis is still a major challenge to the region. However, efforts are being made to solve the problem. In Uganda, it has been reported that Kiira hydro-power station is ready to generate 200MW. This follows tests by Alstom, a French power firm, on units 14 and 15. The tests confirmed the ability of the units to generate power at full capacity, provided there is enough water.
 It has also been reported that a new private power conglomerate wants to construct a 100MW thermal plant in Uganda. Invespro (Uganda) Ltd, a joint venture between IPL Skandinavian of Sweden and MAN B&W of Germany, wants to install a Heavy Fuel Oil (HFO) plant.
 Japan has reportedly offered a Sh3.3 billion loan for the Sondu Miriu hydropower project in Kenya. Up to 81 megawatts in additional power will be added to the national grid when the project is commissioned later in the year.
It is the opinion of GLCSS that the region needs a common energy strategy to prevent the exhaustion of surplus generation capacity. As populations are projected to triple in the next 20 to 50 years, energy needs will also skyrocket. As an illustration, Uganda’s population is expected to reach 103.2 million people in 2050. This projection is based on considerable fertility decline from presently about 7 to only 2.9 in 2045-2050.
 As the region solidifies its blocks, economic expansion will also trigger large energy consumption needs. Failure to match this demand, recession, inflation, and higher unemployment will set in. The growing economy has not been matched by corresponding investment in power generation capacity to support new industries and other users being added to the regional grid. There is a need to rehabilitate existing power stations and invest in short-term electricity generation projects.

William Church is director of the Great Lakes Centre for Strategic Studies, a London-based think tank with offices in Central and East Africa. You may contact William Church at wchurch@glcss.org. GLCSS trains African journalists, offers an on-site internship to foreign African studies students, and manages an exchange program with journalists from the United Kingdom, the United States and Europe.
 
 

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