East Africa is designated to become one of the future oil production center that will contribute of 5 per cent of worldwide production. The major oil producer country will be: Kenya, Tanzania and Uganda. Since 2011 there is a strong debate between East Africa countries and oil multinationals how to utilize the huge oil and natural gas regional reserves. African countries want utilize oil production to reinforce economic boom and make possible the industrialization. West and Asiatic oil company wants that East Africa oil will reinforce the world supply in order to reinforce their industries and economies. The first option forecast that the majority of oil and natural gas will consume on internal markets thanks to a regional network of pipeline and refinery. The second option is business as usually: oil importation for developed countries economic necessity.
Tanzania, the second future larger oil producer in the region, is drafting a policy to ensure that oil discoveries will contribute to economic growth supported by prudent administration, monitoring and regulation of the future Tanzanian oil industry. The new law draft (National Petroleum Policy) will focuses on oil exploration and production, sale and transport, processing, importation of refined fuel and distribution in local market. The new law draft is focus on midstream and downstream activities considered the only solution to assure that oil production will serve national and not foreign interests. Midstream activities include crude oil transport and refinery. Downstream activities include marketing and distribution of refined products to retail outlets. The objective is to emulate Uganda and Kenya imposing that the majority of oil production will be designated for internal and regional markets with the creation of pipeline and refineries regional network. The objective is to involve international oil companies in the regional oil production and consume breaking with colonial export policies till now adopted by oil multinationals.
Tanzania as already a similar policy concerning production and commercialization of natural gas. “In view of the existence of a natural gas policy, which focuses in mid and downstream operations, a robust petroleum policy to govern mid and downstream for oil is required. This will have a great significance in socio-economic development for the country” Ministry of Energy said in an official statement. The new law, under Parliament approval, forecast the setting up of the Tanzania National Oil Company (TNOC). This national oil company will not manage oil exportation as normally the majority of African national oil companies are doing. It will manage oil extraction, refinery process and commercialization. More over TNOC will manage the good utilization of oil profits to boom the economy and to assure benefits for the future generations. Between 2000 and 2014 Tanzania has discovered about 50 trillions cubic feet of gas offshore and 3.8 million crude oil barrels. New crude oil discovered are expected both in onshore and offshore blocks.
West oil companies (meanly from U.E. and US) are totally contrary to East African protectionist oil policies and are trying to reverse the trend. The recent lost battle with Ugandan government are an alarm signal for West oil companies that may be forced to chose between collaborate inside of oil production and commercialization in regional markets or to be excluded over East Africa oil market. Uganda has decided that 60 per cent of oil production will be designated for internal and regional market. Only 40 per cent will be exported to developed countries worldwide. Asian oil company (meanly from China, India and Malaysia) seem to be agree with East Africa oil policies. Brazil, Iran, South Korea and Russia companies may enter in East Africa oil market if West oil company will try to boycott the regional oil policies. Already Uganda Government is choosing between and Russian and South Korea company to build and manage the regional oil refinery in Hoima, north Uganda.
Protectionist oil policies will make possible to create a competitive plastic and motor oil industry with foreign technical support thanks to joint venture with major companies from BRICS countries, Iran and Japan. Despite the attempts to defend the hard line exportation policy some West multinationals have already adopted more pragmatic strategies in order to avoid to be excluded by East Africa oil and natural gas market. The French TOTAL is willing to participate to the production activities under the legal framework and orientation decided by East Africa countries and to assume a predominant position in the regional distribution and sell of carburant and gas for domestic and industrial utilization.
Africa Report 