East Africa Gas – The Potential for Export
In the world of upstream oil and gas, the emergence of a major new prospective area always creates a frisson of excitement. Once the discoveries are assessed and we move past the initial question of how the potential resource base was previously overlooked, attention focuses on the likely ultimate scale of the resource, the cost of development, the likely timing of first production, and the impact of the new supplies on regional and global gas markets.
David Ledesma’s paper on the prospects for gas in Mozambique and Tanzania captures the excitement of the confirmation of a major new hydrocarbon play and conveys the pace at which resources were mobilised and the sheer scale of the discoveries made over a very short time period. The resources, however, are owned by two relatively poor countries with limited institutional capability and capacity. They face the challenge of making decisions on fiscal and regulatory issues which will impact their economies for several decades. Key policy issues include how to ensure that gas is available for the domestic market in parallel with the build up of the export flows necessary for viable development and how to avoid the ‘resource curse’ of currency appreciation, which would harm other domestic industrial sectors.
This paper is a timely description and analysis of the emergence of this major new source of gas supply which is already hailed as a future competitor for Australian and US LNG supplies to Asian markets. For researchers and observers of the natural gas market it provides a comprehensive picture of a gas supply region whose prominence will surely grow throughout the next decade.