Oil in East Africa: A New Frontier for UK Energy Investors

Oil in East Africa is moving from early promise to real steel in the ground. For UK investors used to stories from the North Sea, West Africa, and the Middle East, this region still feels young, but the pace is picking up.

Projects in Uganda, Kenya, Tanzania, and Mozambique are shifting from discovery to large scale development. Pipelines, export plans, and long term contracts are starting to lock in. For investors, that mix of growth, diversification, and new infrastructure is exactly why oil in East Africa is getting more attention.

This short guide gives a balanced snapshot so you can judge where the opportunity sits next to the risks.

Why Oil in East Africa Is On Investors’ Radar

East Africa is moving from the edges of the global oil map toward the center. The big story is Uganda’s Lake Albert basin, which holds over a billion barrels of recoverable crude. This is large enough to support decades of production if projects stay on track.

New pipelines are the link between these inland fields and global markets. The flagship is the East African Crude Oil Pipeline, described in more detail on the official EACOP project overview. Without this route, much of the oil would stay locked in the ground.

Major companies such as TotalEnergies, CNOOC, Tullow Oil, and ExxonMobil are already involved. For UK investors who like growth but worry about execution risk, that level of backing is a clear signal that capital and skills are in place for the long haul.

New oil frontiers in Uganda, Kenya, Tanzania, and Mozambique

Uganda is the current hotspot. The Lake Albert developments aim to move from construction to first oil around the mid 2020s, with production infrastructure now well advanced.

Tanzania is the export outlet. Its territory hosts most of the EACOP line toward the Indian Ocean, turning landlocked barrels into seaborne exports.

Kenya saw earlier discoveries in the Lokichar basin, but progress has been slower, with commercial and political questions still in play.

Mozambique is better known for large gas finds, yet the skills, ports, and services built for LNG also support a broader East African energy story.

Major oil companies already backing projects

TotalEnergies is leading the Tilenga development and the export pipeline, as outlined on its page for Tilenga and EACOP projects in Uganda and Tanzania. CNOOC is driving the Kingfisher field on the opposite side of Lake Albert.

Tullow Oil has a long record in Uganda and Kenya; its profile for Uganda operations helps show the scale of the Lake Albert development plan. ExxonMobil is more closely linked with gas in Mozambique, but its regional presence still matters for services and partnerships.

For UK investors, this kind of lineup can cut some political and technical risk. Large operators tend to bring tighter project controls, deeper pockets, and more transparent reporting.

Key Projects Shaping the Future of Oil in East Africa

The region’s story really turns on a handful of flagship projects. If these work, they open the door for follow on drilling and midstream assets.

Lake Albert oil fields in Uganda

Lake Albert holds over a billion barrels of recoverable oil, split across several fields. The Tilenga and Kingfisher projects are designed to tap this resource, with hundreds of wells, processing plants, and new roads under construction.

Recent updates suggest civil works are nearly complete and many wells are already drilled, with first oil expected around the middle of the decade. For investors, this upstream hub is the main driver of future cash flows linked to oil in East Africa.

East African Crude Oil Pipeline (EACOP) to global markets

EACOP is a 1,443 km heated pipeline from Uganda to the Tanzanian port of Tanga. It is under active construction and reported to be more than halfway complete, with a rough start up target around the mid 2020s.

The project, described in detail on the East African Crude Oil Pipeline Wikipedia page, will cost several billion dollars and includes solar powered pumping stations to cut some operating emissions. Once it is running, Uganda can export crude directly to global refiners, which is key to turning reserves into state revenue and investor returns.

Risks, Challenges, and ESG Concerns for UK Investors

The upside is clear, but the risk side of the ledger is equally important. Environmental, social, and policy issues are central for any UK investor with ESG targets or fiduciary duties.

Environmental and climate impacts around drilling and pipelines

Parts of the Tilenga project sit inside or near Murchison Falls National Park and wetlands. That brings clear risks around deforestation, habitat loss, and potential oil spills in sensitive areas.

EACOP and the associated production are expected to add significant carbon emissions each year. For investors facing stricter climate rules at home, this can affect access to finance and the cost of capital. Several banks and funds have already faced pressure over lending to EACOP and similar pipelines.

Community, land, and policy risks to watch

Land acquisition and resettlement in Uganda and Tanzania have triggered disputes over compensation and timing. Civil society groups argue that some households have seen delays or low payments, which can turn into protests, lawsuits, or project slowdowns.

Tax rules and local content demands also shape long term returns. Changes to exemptions, royalties, and profit sharing can shift value between governments and investors. Public pressure in Africa and Europe has real influence here, so UK investors should track local politics and community voices, not only company reports or national plans.

Conclusion: A Higher Risk, Long Term Play

Oil in East Africa offers growth, diversification, and entry into a young producing region, but it comes with real environmental, social, and political risk. For UK investors, this looks more like a higher risk, long duration position than a quick trade.

Careful partner choice, strong ESG checks, and close attention to local stakeholders are essential. Over the next decade, global climate policy and the strength of local governance will shape how much of the promised value actually reaches investors. Anyone considering exposure should weigh upside against these structural challenges before committing capital.