East Africa oil export plans make way for showdown

Significance

The announcement comes after the feasibility study by Toyota Tsusho reportedly concluded that a cross-border oil export pipeline appears economically viable, favouring Lamu as the final destination. However, low oil prices, a slowed exploration rate in Kenya and political barriers raise questions on how development of the region's oil finds can be made economically sound for the companies involved.

Impacts

• South Sudan's inclusion in a regional export system is likely to be suspended until conflict subsides.
• Production of its higher quality Nile Blend oil from Unity State fields will remain shut for the foreseeable future.
• The fixed per barrel rate to Sudan, including extra to compensate for the loss of fields after secession, will be renegotiated in 2016.