Petro-Politics in East Africa

Is LAPSSET under threat? May be.

The Economist reports:

The Lamu pipeline makes the most economic sense for all involved. But failure to work together may doom it. National and personal interests trump regional co-operation and commercial logic. In Uganda Mr Museveni is keen to settle his legacy as the champion of a strong nation, building vast refineries and spiting the tiresome Kenyans. South Sudan is fixated on warding off the north at the expense—it seems—of almost everything else. Ethiopia sees a chance to steal Kenya’s thunder, too. “It’s every guy for himself,” says an oil executive wryly. “And I thought the private sector is rough.” Pipeline politics makes a mockery of the East African Community, a bloc dedicated to regional co-operation. All but one of the countries are members or aspire to join.

Of late, a new momentum behind the oil push is being felt. The Ugandan government is in final production talks with three oil companies. Executives from Tullow, Total and the China National Offshore Oil Corporation (better known as CNOOC), as well as local civil servants, conferred with Mr Museveni at his farm near the Rwandan border in late April. In June South Sudan will finish a feasibility study for the Ethiopian pipeline to Djibouti, after which it has said it will make a decision on export routes. “Everything is up in the air,” says a diplomat. Kenyan and Ethiopian officials, as well as oil-company representatives, have been scurrying to Juba to make their case. Pagan Amun, who leads South Sudan’s talks with the north, is said to be keen to ditch the Lamu pipeline.

My guess is that Nairobi, for historical reasons, will prevail in Juba. Plus Juba and Addis are not the best of buddies, despite recent warm relations. Mengistu was a key ally and supplier of SPLM before he was overthrown by Meles and his army. The departure of Meles may have made things a little better. Time will tell. Uganda will most likely construct a mini-refinery as it is not integral to the implementation of LAPSSET.

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