East Africa has become a promising new frontier for oil exploration and major multinationals are jostling for the rights to search for black gold, according to  industry experts.

“There are still large areas which are essentially unexploited and major efforts are needed in East Africa,” Tiziana Luzzi-Arbouille, an African specialist with IHS Global Insight said.

While the Atlantic coast of Africa - most notably Nigeria and Angola - has long been exploited by Western oil companies, it took decades for the industry to turn its sights to the East.

Things changed in 2006 with the first significant discovery in Uganda.

Since then another 15 sites have been confirmed, said Luzzi-Arbouille, who estimates Uganda’s oil reserves at around 700 million barrels.

“What happened in Uganda made it easier for smaller companies to raise funding,” said Tewodoros Ashenafi, head of Southwest Energy, an Ethiopian company exploring in that country’s Ogaden basin.

“Many people were saying: there is nothing in Uganda. Many people are saying, there is nothing in Ethiopia,” he said.
“In about a year and a half, I’m looking forward to saying I told you so.”

Significant natural gas reserves have been discovered in Tanzania and Mozambique.

Ethiopia and Somalia are also sites of intense exploration. And Madagascar holds “enor-mous reserves”, Luzzi-Arbouille said.

Major oil companies have thrown themselves into the race: French group Maurel and Pom is drilling in Tanzania, while US group Anadarko and Norway’s Statoil are drilling in Mozambique’s Rovuma basin.

“At the beginning, smaller companies were taking the risks.

“Now all of a sudden we see the big fish arriving,” Luzzi-Arbouille said.

Britain’s Tullow was battling with Italy’s Eni for control of the Ugandan deposits in Lake Albert, after its Canadian partner, Heritage Oil, sought to sell its 50 per cent stake in two oilfields.

Tullow prevailed last month and bought the stake for $1.5 billion. It has said it will seek a partnership with a large exploration comp-any in order to offset the colossal investm-ents needed to exploit the oilfields and develop the infrastructure needed to transport the crude.

Comments by high-ranking Ugandan officials indicate the short list includes China’s state-controlled CNOOC, France’s Total and US giant Exxon Mobil.