If September was the month for oil announcements out of West Africa, October is the month for East Africa, as several major oil and gas companies have announced discoveries of the southeastern coast of the continent.

Gas!
Historically, Eni (NYSE: E) and other drillers have placed emphasis on oil and gas exploration on the northern and western sides of the continent. That tune may change now that Eni, Africa's largest oil and gas producer, has announced a discovery of 15 Tcf of natural gas off of the coast of Mozambique.

At the end of August, Anadarko Petroleum (NYSE: APC) also discovered natural gas off the coast of Mozambique. Two weeks ago, the company upped its recoverable-gas estimate from 6 Tcf to 10 Tcf. How much gas does that equate to? It's enough to power France, Germany, Italy, and the United Kingdom for a year.

Past production
The discovery of gas in such plentiful amounts is a big deal in this region. Though the Energy Information Administration doesn't have production numbers for 2010, you can see that in 2009 there was virtually no energy being produced in East Africa.

Country Past Production
Mozambique No oil, 124 Bcf gas exported in 2009
Kenya No oil, no gas
Tanzania No oil, 23 Bcf gas exported in 2009
Madagascar No oil, no gas

Source: Energy Information Administration.

Discoveries by Eni and Anadarko will break production and export records, notablly at a time when Asia and Europe are clamoring for natural gas.

Other players
Anadarko and Eni aren't the only oil and gas outfits looking to cash in on East Africa plays. Here is a breakdown of ongoing activity in the region:

  • Royal Dutch Shell (NYSE: RDS-A) is parterning with Brazil's Petrobras to explore off the coast of Tanzania.
  • Total SA (NYSE: TOT) is joining Anadarko in an effort to explore offshore of Kenya. And of course, you can't talk about natural-gas discoveries without bringing up LNG.
  • Anadarko is in talks with KBR (NYSE: KBR) about developing a liquefied natural gas facility if actual production amounts to anything near estimates.

Risk
The political risk for oil and gas operations in this region is high. Somalia is unstable, there are pirates off the coast, and the economies of these countries are very poor. Mozambique, for example, is one of the poorest countries in the world. It is likely that oil and gas drillers will face similar problems on the east side of the continent as they do on the west, where governments have done a poor job distributing wealth generated from oil, often resulting in frustrated citizens who loot and damage drill sites.

Foolish takeaway
Now that East Africa is on its way to becoming an established gas play, midstream development needs to follow. China has already expressed interest in building a pipeline in Tanzania, and South African officials hope the new gas discoveries will help mitigate its energy shortage. Interested investors should keep an eye on pipeline and LNG development in the region.