(Ecofin Agency) - The African Development Bank on Monday said the proposed oil pipelines in Kenya and Uganda to transport crude from the port to fields, have offered a great opportunity for private investors who are eager to improve their portfolio in East Africa’s energy industry.

“Nobody has ever, ever lost money financing pipelines. If there is oil flowing, it’s generally viable,” Gabriel Negatu (photo), AfDB’s regional director for East Africa, said.

The East African countries are in a hurry to begin exploring crude oil reserves estimated at 1.7 billion barrels in Uganda and 750 million barrels in Kenya and are set to start pipeline construction by 2018, even though the present low oil environment has affected the finances of producers globally.

“Prices should stabilize around at $60 per barrel next year, barring the unforeseen. At that point I think the industry will adjust to that reality and figure out how to become viable and profitable,” Negatu added.

Kenya estimates oil production by Tullow Oil Plc to start in mid-2017, to be initially transported by road and rail to a refinery at Mombasa as the government plans to commence the construction of an 865-km pipeline connecting fields in its northern region to a port at Lamu on the Indian Ocean coast by 2018.Work on Uganda’s pipeline, is also expected to begin in 2018. Total SA, China National Offshore Oil Corp. (CNOOC) and Tullow are currently developing oil fields in Lake Albert basin after the Ugandan government granted the three companies, production licences that will be in effect for 25 years.

“The AfDB will support the pipelines with whatever means available. If there are two different pipelines, we will talk to both sides and find ways to make resources available,” the regional director told Bloomberg.

Anita Fatunji