The politics of oil in eastern Africa

Abstract

After many years in which the potential for the development of the petroleum industry in eastern Africa has been largely ignored, the last five years has seen a resurgence of interest in oil exploration across the region. Long characterised as a “risky” frontier because of the difficult nature of the region's geology and the volatile character of its politics, the sharp rise in international oil prices, coupled with the difficulties in accessing other supply areas, has altered the prospects for successful commercial development of smaller fields known to exist in the region. The successful discovery of large oil deposits in the Lake Albert region of Uganda has encouraged the industry to view the region more positively, bringing an influx of new and established companies to tender for exploration rights in a wide range of fields covering Puntland, Somaliland, Ethiopia, Southern Sudan, Uganda, the DRC, Kenya, and Tanzania. This paper charts the extent of this oil exploration and industry investment in the region over the past decade, and discusses the economic and political implications of significant oil finds for future development. Additional exploitable oil fields may yet be discovered, but if only the Uganda fields are developed this is likely to have a considerable impact of the regional economy and upon relations between neighbouring states.

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