First East African oil drilling contractor established
29 November 2013, 09:43
Nairobi - East Africa's first land based locally-owned drilling contractor is just starting up, signaling the intention of local investors to get a share of the region's nascent hydrocarbon boom.
The company, Canyon Drilling East Africa Limited (CDEA), has been mostly funded with east African private equity sources and investors include Charles Mbire, chairman of MTN Uganda, a unit of South African mobile phone company MTN Group.
Based in Nairobi, CDEA is finalising an operational facility in Mombasa and a branch hub in Kampala, the new company said in a statement on Thursday.
It also said it has been awarded its first contract, which will be for two years in Kenya. The details will be made public in December.
Investors say it is a step toward filling a big gap in a region which is new to the oil industry.
"There is no expertise in this area and governments want local content," Mbire told Reuters by telephone.
"We also hope it will empower local investors and people so we don't have a repeat of what happened in Nigeria, where people feel they have not benefited from the industry," he said.
Around $24 million in private equity has been raised from Ugandan and Kenyan sources.
East Africa is a new destination for hydrocarbon investments, with big gas finds off the coasts of Tanzania and Mozambique and oil discoveries in Uganda and Kenya which promise to help accelerate already brisk rates of economic growth on the world's poorest continent.