Investor interest in East African oil may wane

Subject

East Africa oil development prospects.

Significance

The low price of oil is affecting the pace of exploration and development of new hydrocarbon reserves in East Africa; however, political considerations and infrastructure questions are also playing a role. Overcoming infrastructure hurdles and producing economically viable oil will be vital if hydrocarbon discoveries are to fuel economic growth in the region.

Impacts

• Energy shortages will hamper East African countries' ambitious growth plans.
• Deferred investment in capital-intensive development projects will slow economic growth in regional states.
• Delayed gas export developments risk losing market share to quicker, cheaper projects.
• Resumption of hostilities in South Sudan could further damage oil output.