kenya's deposits

Kenya’s deposits may be up to 10-billion barrels

East Africa lacks local oil expertise
by Steve Mbogo, August 28 2013, 07:32
Steve Mbogo
East Africa lacks local oil expertise
NAIROBI — East African countries are grappling with the challenge of how to fast-track training of oil and gas engineers after unexpected and continuing discoveries have positioned the region as a future global oil hot spot.
Tanzania may have 40-billion cubic metres of gas, expected to double by 2015, while Uganda has an estimated 3.5-billion barrels of oil. Kenya’s deposits may be up to 10-billion barrels, according to Tullow Oil’s chief operating officer Paul McDade.
Authorities in the region, in need of new revenue sources to cover widening budget deficits and finance infrastructure, have been putting pressure on exploration companies to start pumping oil and gas.
The lure for money and agitation for equity in distribution of oil and gas wealth by local communities have reduced focus on the priority issue of training local oil and gas human resources, industry players said.
The dearth in local experts has paved the way for skilled labour from the Middle East and West Africa where oil and gas extraction is already established.
In the meantime, locals will have to watch from the sidelines as expatriates take dominant positions when oil and gas pumping starts by 2016, a rough date set by Tullow Oil.
"The first steps we should be taking are on how to build local human capacity.
"Our universities rarely teach oil and gas courses. We need international partnerships to start such training here," said Petroleum Institute of East Africa CE Wanjiku Manyara.
The exact number of qualified oil and gas engineers in three East Africa countries — Kenya, Uganda and Tanzania — is not known but engineering associations say it is less than 20.
Engineer registrations boards of the three East African countries also do not recognise oil and gas engineers in their registration categories, according to members of the respective boards. But this will need to change as oil and gas are promising to be a major economic sector, based on the volume of discoveries made.
Because of perennial failure to strike oil and gas in East Africa, regional universities have ignored teaching related engineering courses. Departments of geology are the closest the local universities have came to teaching oil and gas.
Mwendia Nyaga, the lead consultant at Oil and Energy Services and the former MD of the downstream state-owned National Oil Corporation of Kenya, said the shortage of human resources is worrying and should be addressed as a priority.
"We should focus on building the necessary knowledge and skills to join industry instead of waiting for goodies from exploration firms and the government. East Africa needs at least 10 years of intensive training programmes to make a lasting impact on employment in oil and gas. Given a choice, foreign firms would prefer to hire locals if they are cheaper and help them gain political capital," he said.
Mr Nyaga said the region needs to build capacity by training lawyers, economists, financial analysts and accountants, among others, who understand industry in addition to geoscientists and petroleum engineers.
Martin Heya, petroleum commissioner in the ministry of energy, said Kenya has taken the option of offering scholarships in oil and gas to graduate trainees in petroleum and reservoir engineering, among others. In June, the state-owned National Oil Corporation of Kenya and the University of Nairobi signed a petroleum capacity building, research and development agreement.
This will facilitate short-term training partnerships, staff exchanges, information swap and sharing of equipment and technical expertise.
Geology graduates from the University of Nairobi will be offered further training by the National Oil Corporation of Kenya, which plans to engage in oil exploration from this retail focus by next year.
The National Oil Corporation of Kenya is already training 34 management candidates on various aspects of the upstream petroleum exploration and production as the state agency plans to diversify into upstream activities next year.
National Oil Corporation of Kenya CE Athman Summaiya said the trainees will undergo two years of intensive training locally and abroad before being deployed in Kenya.
While regional laws require that capacity building be part of the production sharing agreement, this has not had an effect as discoveries have been made in only the past 10 years.
Tullow Oil, which has discovered oil in Kenya and Uganda, recently awarded 10 Kenyan students scholarships to pursue masters degree studies in exploration geophysics and petroleum engineering, oil and gas law, and environmental science at top universities in Britain.
The company has been undertaking a similar scholarship project in Uganda, Ghana, Mauritania, Côte d’Ivoire, Gabon and Ethiopia.
"We collectively need to build local capacity early to be able to support a promising oil and gas industry. National capacity means human resources, and growing Kenyan business to support industry," said GM Martin Mbogo.
Kenya, Tanzania and Rwanda have sought the assistance of the African Legal Support Facility that helps countries negotiate better contracts and build oil, gas and mining human resources to avoid future conflicts and guarantee future benefits from oil, gas and other mineral wealth.
Stephen Karangizi, CE and director of the African Legal Support Facility, said its support is demand driven and confirmed working with Kenya, Tanzania and Rwanda.
African Legal Support Facility was set up by the African Development Bank to help African countries sign balanced extractive resource contracts.
The shortage of natural resources negotiating skills in Africa is severe, with even the African Legal Support Facility being forced to use non-African consultants.
Sub-Saharan Africa vacancies for oil and gas engineers are estimated at 1,900 and the region has a net supply of petroleum engineers of minus 250, according to SBC Oil & Gas HR Benchmark 2012.

Cheers T