The upstream sector of the gas and oil industry in Kenya has seen considerable growth in recent years. This increase has been driven by increased investment in production, with production set to reach XX mboe by 2023. In 2017, the upstream market was valued at USD XX Billion and is expected to increase by XX% by 2023. In 2017, the proven oil reserves in Kenya were approximately XX Billion barrels, while the proven gas reserves were XX Tcf. The market for Kenyan oil and gas was valued at USD XX Billion in 2017 and is projected to grow by XX% by 2023.
Impact of COVID-19 pandemic on oil and gas industry
The recent COVID-19 pandemic has caused many companies to reconsider their policies and practices, as a result of the looming threat. The oil and gas industry is viewed as a conservative industry, but changes in the industry could lead to greater flexibility and adaptability for its workforce. Indeed, the COVID-19 pandemic has prompted many companies to allow remote work and flexible work hours, which could help the industry connect with the values of the next generation.
The O&G sector is particularly vulnerable to the impact of pandemics and the impact of COVID-19 is no exception. While typical contingency plans focus on operational effectiveness after an event, they often fail to factor in health emergencies. The sudden drop in oil prices, COVID-19-induced dampened demand for crude oil, and failed OPEC-Russia negotiations will all affect the industry.
The global aviation industry is also affected by the COVID-19 pandemic. A study published in the Journal of Air Transport Management highlights this. The study was conducted in May 2021, when the COVID-19 pandemic had reached its peak in the Turkana East sub-county. Although COVID-19 has caused widespread destruction in the host communities, the impact of the pandemic on the oil and gas industry in Kenya has led to increased awareness of the pandemic and improved training of oil workers.
Growth of non-associated gas source segment
The non-associated gas source segment is expected to grow faster than its associated gas counterpart. The non-associated segment of the gas market is estimated to hold more than 50% of the market by 2020. While associated gas accounted for most of the market share in 2016, it is expected to lose a significant portion of its share over the next few years.
The non-associated gas source segment is expected to account for more than 54% of the market in 2030. This segment will grow at a high CAGR of 8.5% between 2022 and 2030, while associated gas will grow at a lower CAGR. Gas is widely used in the industrial, automotive, and residential applications.
The non-associated gas source segment is likely to continue to grow, supported by a growing population and a booming economy. The government has already set a target of 80 million free cooking gas connections by 2020, which should encourage growth. However, the government must continue to market non-associated gas sources at low prices in order to attract and maintain customers. Investment is expected to support growth in the market.
Growth of liquefied petroleum gas market in Kenya
The liquefied petroleum gas (LPG) market in Kenya is experiencing growth thanks to increased demand in commercial and domestic sectors. The demand has increased from 78,000 tonnes in 2008 to over 100,000 tonnes today. However, the market is still relatively underserved with low consumption levels owing to limited storage facilities, poverty and other issues. Total Kenya distributes LPG, both for domestic and commercial uses, through ISO 9000 certified depots.
The growth in the market is expected to be driven by various factors including government initiatives and technological advancements. In addition, the growing population is likely to drive the demand. The government’s policies to promote the use of LPG over traditional fuels such as petrol and diesel are likely to contribute to its rapid growth.
Increasing availability of cheap LPG and improving the efficiency of LPG distribution will help the market grow faster. If the prices remain low, Kenya can become an import hub for LPG in the region. In addition, Kenya could also export LPG to neighboring countries.
Impact of war in Ukraine on oil and gas industry
The conflict in Ukraine is causing ripple effects in the oil and gas industry in East Africa. While Russia has assured the world that the conflict will not lead to war, its demands are aimed at ensuring Ukraine does not join the North Atlantic Treaty Organisation (NATO). As Uganda recovers from its recent fuel crisis, it is feared that the conflict could mean higher fuel prices and shortages in the region.
Trade between Kenya and Ukraine is relatively small compared to Kenya’s total trade with other countries. In 2020, Kenyan exports and imports totalled USD 9 million and 70 million, respectively, representing 0.46% of Kenya’s overall trade. Trade between the two countries, however, is based on long-standing relations and mutual respect. In fact, a Kenyan delegation recently visited the country to discuss ways of improving trade relations.
The conflict in Ukraine poses a major threat to the global economy and many African countries are directly affected by the conflict. The conflict has already driven oil crude prices to unprecedented levels. In addition, Africa is heavily dependent on oil and food imports from Russia and Ukraine, and a spike in prices will likely impact its food security and socio-economic recovery.