Oil and gas exploration is now the hot button in driving East African’s region economy, various countries are tapping into the available resources in a bid to fill the huge gap in energy generation.The East African governments have been working together in the realization of the oil and gas exploration. Countries such Kenya and Uganda have gone further to appoint a technical consultant to oversee the oil exploration sector.

Uganda is also gearing up to fill in the gap in the oil exploration sector with its major exploration activities taking place around the Lake Albert. The country is rushing to have a major share in the precious commodity, black gold. Major strides have taken place in the country as the Government of Uganda recently amended the VAT Act to relieve oil exploration and development from VAT. The country reviewed its tax policies in a bid to streamline the operations of oil and gas companies. 

The amended  changes is to allow licensed petroleum and mining firms to register for VAT during the exploration and development stages of operations. It further extended tax refunds for upstream activities in exploration and development.Progress on the East African pipeline route to export oil from Lake Albert in Uganda and the South Lokichar Basin in Kenya has also gained momentum in the recent months. “The Governments of Uganda and Kenya are working closely together and pipeline studies are on the way as the decisions are awaited on the third quarter of 2015.” according Tullow Oil Company.  Tullow Oil further   reckons that the signing of the pipeline deal could see plans to develop oil exploration and production projects in the region.

With huge plans to start the commercial production of 6.5 billion barrels of crude oil discovered in the Albertine, the country has licensed  two  explorers namely  French based multinational company, Total E& P and Tullow Oil Company which is in partnership with China National Offshore Oil Corp to carry out exploration activities. Tullow oil has already drilled 79 wells and developed its prospects. Recently, Total E & P floated the idea of having a different oil route via Tanzania unlike the Lokichar route in Kenya citing insecurity issues on the northern part of Kenya. It further pointed out that Tanzania was also upgrading its Tanga‘s port which had the capacity to offload petroleum products. The developments make the pipeline project future quite bleak as the heavy clouds of expectation of a joint pipeline stands on a rocky place. However, the two governments have dismissed the claims and stuck to the original plan of the Lokichar route.

Preparatory works to upgrade Tanga’s Port’s capacity to offload petroleum products. This development makes the future bleak with the heavy clouds of expectation between Kenya and Uganda standing on a rocky place. With oil discoveries done a decade ago, Uganda has in the last few months   has put up efforts to oversee a conducive environment is maintained to attract investors in the oil and gas industry. The sector will bring a paradigm shift in Uganda’s economy. As Uganda’s oil beckons to investors, international companies shy away from exploration due to the plunging oil prices per barrel.

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