East African energy boom investments to take focus in budgets

Kenya, Uganda and Tanzania plan to allocate money in their annual budgets to spur investment in infrastructure to exploit oil and natural gas from deposits that companies including Tullow Oil are developing.

Ugandan and Kenyan oil discoveries, made in 2006 and 2012 respectively, and new gas finds off the coast of Tanzania that have boosted reserves to as much as 46 Tcf have seen East Africa become a frontier for petroleum exploration.

The three countries, along with Rwanda, which are all members of the East African Community, will present their budget statements for the financial year starting July 1.

The Kenyan Finance Ministry said in its 2014 budget policy statement that the government wants to “fast track” building a pipeline to export the crude.

Kenya also expects to increase its spending on infrastructure by 15% $2.9 billion in 2014-15 from a year earlier, according to the Treasury’s budget policy statement.

Tanzania is building the $1.23 billion Mtwara gas pipeline project with a loan from the Export-Import Bank of China, while Statoil and BG Group, are working on a project to build a LNG export plant. The government plans to present new natural gas rules to parliament in November aimed at helping the country get more benefit from its natural resources.

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