The oil and gas sector in East Africa is projected to attract massive inflows of investments over the next decade as foreign companies seek to exploit the newly discovered deposits.

A new report by UK-based business intelligence firm Visiongain, titled ‘East African Oil & Gas Market 2015–2025’, contends that the region is fast becoming one of the world’s most interesting oil and gas hot spots.

The report states that, this year alone, East Africa’s oil and gas sector will attract a staggering $4-billion in capital expenditure (capex) for both upstream exploration and development and midstream infrastructure.

“The discovery of both oil and gas reserves in the region over the past five years has created opportunities in a number of East African nations for foreign companies.”

States the report: “East Africa covers a territory roughly six times the size of the North Sea but fewer than 600 wells have been drilled in the region to date.”

The report estimates that Kenya’s oil and gas industry will this year see $482-million in capex, with this figure projected to rise to $2.2-billion by 2020 as foreign companies invest in onshore and offshore exploration and production.

The country, which has discovered oil currently estimated at one-billion barrels, also expects to attract investments in pipelines, a refinery and storage facilities.

In Ethiopia, upstream exploration and development and midstream capex are expected to rise from $47-million in 2015 to $432-million by 2025.

The report states that Mozambique’s and Tanzania’s substantial offshore gas reserves and the two countries’ proximity to Asian demand centres offer the potential for liquefied natural gas export by the end of the decade.

Notably, the report projects that investment in the region’s oil and gas industry will drop when countries that have discovered the hydrocarbons start commercial production.