UK pledges $30 million to support growth and development of East Africa’s oil and gas sector

British High Commissioner, Nic Hailey has said the UK will have commit $30m towards the development of local content, technical advice towards developing legislation and regulation, research, and engagement with the industry and civil society. He says this funding will also help the region get the necessary investment and develop the necessary skills and knowledge which will help to drive the sector’s growth.

Speaking during the 4th East Africa oil and gas summit the high commissioner noted that British companies continue to play a big role in the region with Tullow Oil behind the biggest oil discoveries in Uganda and Kenya while BG Group and Ophir Energy are leaders in offshore gas exploration in Tanzania and Mozambique.

“These companies are committed to adding value into the East African economy, building local expertise and creating jobs,” Hailey told the conference delegates.

Hailey says education and developing local content are also emerging as key areas for partnership and to this end the University of Aberdeen last year teamed up with the University of Dar es Salaam on a $2m grant to help develop Tanzania’s oil and gas sector by developing local human resource capabilities. The 2 universities are working together to develop a curriculum across a range of energy-related disciplines including engineering, geosciences, social science, business and law.

UK companies are investing in education through scholarship programmes such as the Tullow Group Scholarship Scheme which has helped bridge the skills gaps in the oil and gas sector within the countries in which Tullow operates. 76 Kenyans have been awarded scholarships to UK universities and received postgraduate qualifications in the energy sector. BG Group runs a similar programme in Tanzania, with 34 scholarships having been awarded since 2012. The beneficiaries have all since returned to Tanzania, and have been recruited by locally-based oil and gas companies.

On a government level, the UK – with support from Germany – has designed the Skills for Oil and Gas Africa programme to maximise local employment in the regional oil and gas sector. The programme focuses on Kenya, Uganda, Tanzania and Mozambique, working closely with the private sector and government to equip local populations with the skills needed to seize job opportunities in the sector. The 5-year project is expected to help around 32,000 local people find sustainable jobs, with a contribution of £25m from UK Aid.

“With the new discoveries of oil and gas across the region, we must get the business environment right for the exploitation of extractives in a sustainable and equitable way. We need to encourage investment whilst ensuring local populations benefit from revenues,” Hailey adds.

Hailey noted that it was important to solve the critical issues that remain around how revenues are shared between local communities, at county and national level adding it was important to balance the benefits to countries as a whole and to ensure that the security and enabling environment in the oil producing areas is right.

On infrastructure he says the UK government has started supporting the integrated planning for the LAPSSET Corridor where substantial infrastructure investment is required in roads, railways, ports, power lines which will enhance national and local revenues.

The UK has over 50 years of experience in North Sea Oil and Gas which has given it a global competence in all aspects of exploration and production and the Oil and Gas industry supports over 375,000 jobs in the UK. The top 2 UK firms listed by market capitalization are in the extractives industry (Royal Dutch Shell and BP), and there is a wealth of UK companies leading the way in designing, financing and implementing oil and gas construction projects across the world.

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