Dearth of Infrastructure Investment Challenges Energy Resource Development in Mozambique, Tanzania

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)-- Mozambique and Tanzania are bursting with oil and gas resource potential, but are challenged by their need for infrastructure investments.

Africa's energy industry could boom in the future, with Mozambique and Tanzania set to emerge as frontiers, if they can attract that crucial inflow of investment, according to a study by PricewaterhouseCoopers (PWC) (London, England).

Six of the top 10 global discoveries in 2013 were made in Africa, and more than 500 companies are now exploring across the continent. Large gas finds in the two countries would make the world take note of eastern Africa as an emerging player in the global industry, said the report's leader, Chris Bredenhann.

Transactions worth about $1 billion occurred every 17 days in Africa's oil sector last year. But the continent continues to face fierce competition in the global market for that crucial investment stream. The report said that the cost of required infrastructure is a huge obstacle, which neither country can afford without help from foreign investors.

In 2013, Africa produced nearly 9 million barrels per day of oil. More than 80% of the total came from established players such as Nigeria, Libya, Algeria, Egypt and Angola. Gas production is more concentrated, with 90% of the annual 6.5 trillion cubic feet coming from Nigeria, Libya, Algeria and Egypt.

Mozambique could become a major competitor in the Asian market when its exports come online in 2020, as international energy majors are investing in resource development. Another growth driver will be the rise in domestic demand, with growing populations, urbanization and demand from the emerging middle class.

For related information see October 22, 2014, article - Eni Works with Kogas, Anadarko to Exploit Mozambique's LNG Potential.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.