Oil discovery could lead East Africa to prosperity or infection of “Dutch disease”

Oil drilling platform

Time.com is reporting on what might be another dent to the peak oil theory and lead a new oil rush to east Africa. This can be either good for the region or bad (just look to what has happened to the middle east rich oil states.)

Seismic tests over the past 50 years have shown that countries up the coast of East Africa have natural gas in abundance. Early data compiled by industry consultants also suggest the presence of massive offshore oil deposits. Those finds have spurred oil explorers to start dropping more wells in East Africa, a region they say is an oil and gas bonanza just waiting to be tapped, one of the last great frontiers in the hunt for hydrocarbons. “I and a lot of other people in oil companies working in East Africa have long been convinced that it’s the last real high-potential area in the world that hasn’t been fully explored,” says Richard Schmitt, chief executive of Black Marlin Energy, a Dubai-based East Africa oil prospector. “It seems, for a variety of geopolitical reasons, that more than anything else, it’s been neglected over the last several decades. Most of those barriers are currently being lowered or [have] disappeared altogether.”

It all comes down to management and proper oversight by both the local government and rule of law, especially business law. It is not in any one’s favor for the region to go down the same path as Hugo Chavez. With the right plans and implementation, energy resource might just what is needed as a solid foundation towards down the road of prosperity for the region.

More Oil spots in Africa.

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