Seeking Alpha

Kenya shutdown cools east African oil ambitions

  • Tullow Oil's (TUWLF, TUWOY) suspension of drilling in Kenya after weekend protests shows how popular impatience for a share of the spoils is compounding the problems energy firms face building an oil and gas industry from scratch in east Africa.
  • While the suspension is a blow to Kenya's government, investor confidence is another casualty; while east Africa is new hot new spot for oil and gas exploration, excitement has been tempered by wrangles with governments, gaps in regulations and rickety infrastructure.
  • Local populations are understandably anxious for a windfall, but production may be years away, and such disruptions are more likely to slow the area's emergence as a significant producer, a Reuters analysis says.
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