The United Arab Emirates (UAE) is strengthening foreign policy to build influence in East Africa and countries along the Red Sea as it secures large investment deals in the region’s oil and gas sector.

The Emiratis are capitalising on East Africa’s energy potential, which is underdeveloped and receives less interest from traditional investors in the United States, Europe, and China. A series of investments in oil infrastructure lays the groundwork for Gulf investors to move into oil production opportunities in the region.

A $4bn oil refinery deal in Uganda by Dubai-based Alpha MBM Investments, a facility with a capacity of 60,000 barrels per day, should be completed within three years.

Alpha MBM, led by Sheikh Mohammed bin Maktoum, a member of Dubai’s royal family, will hold a 60% stake in the Uganda Refinery Holding Company, with the national government retaining the remaining 40% ownership.

A similar refinery project in Kenya, involving Saudi Aramco, is also under consideration, with analysts viewing it as an early opportunity for Emirati investors to eventually participate in the country’s local oil production in the future.

Opiyo Wandayi, Kenya’s energy and petroleum cabinet secretary, tells The Africa Report, without providing more details, that the oil refinery deal “is not yet finalised but discussions are in the final stage”.

Kenya has not had strategic oil stock. It is now critical given the geopolitical scenes around the Red Sea

The deal, led by Saudi Aramco subsidiary Aramco Trading Fujairah FZE, will enable the oil giant to transform the defunct Kenya Petroleum Refinery Limited (KPRL) — acquired by Kenya Pipeline Company (KPC) in 2023 — into a modern oil storage hub.

Saudi Aramco is not new to Kenya. It is among the few Gulf oil giants selected in April 2023 to supply fuel through a Government-to-Government oil arrangement after Kenya abandoned the previous open tender system.

“Kenya has not had strategic oil stock. It is now critical given the geopolitical scenes around the Red Sea. As KPC and KPRL engage private sector participants, it is a question of who is willing and has the resources to invest in the storage,” Daniel Kiptoo, director general of the Energy and Petroleum Regulatory Authority (EPRA), tells The Africa Report.

These deals follow months of active engagement. Between June and December 2024, Uganda held several talks with UAE delegates. In January 2025, Kenya also signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, solidifying Abu Dhabi’s growing focus in a region seen as the most integrated in Africa.

Tight grip on oil flows

The completion of oil storage facilities in Kenya and Uganda, along with the existing Dubai Port (DP) World’s operations in Tanzania’s Dar es Salaam port, will provide the UAE a tight grip on East Africa’s oil flow, whether through imports or anticipated local production.

However, the necessity to secure these commercial facilities amid threats to international shipping from Yemeni Houthis will likely reinforce the UAE’s ongoing engagement in the region. This is in light of the potential spillover of attacks on East African assets and nationals.

In the Horn of Africa, where the UAE faces a challenging security issue stemming from the Red Sea near Yemen, Emirati leaders have sought defence and security agreements, primarily with Egypt, Sudan, and terrorism-plagued Somalia.

Kiptoo notes that the Kenyan government has already “taken active steps in protection of critical infrastructure including having a dedicated energy police unit within the ministry of energy and petroleum”.

But these investments equally present a potential shift in the geo-economic relations in the region. As Uganda advances with its oil projects, it signals a significant revenue loss for Kenya. KPC has been serving the hinterland countries and expanded oil transit infrastructures that now risk being underutilised due to Uganda’s export prospects.

A relatively efficient oil pipeline and port operations currently provide Kenya with a competitive advantage over rival Tanzania. Joe Sang, the chief executive officer of KPC, the state-owned entity overseeing oil transit, says: “Once we have the Uganda oil project ready we can consider a reverse pipeline.”

“At the moment, we still have a larger market to serve and even generate more revenues,” says Sang. Uganda and Tanzania have also planned the $5bn East Africa Crude Oil Pipeline (EACOP) as a landmark cross-border infrastructure project. The 1,443 km line from Homa in Lake Albert, Uganda, to Tanzania’s Tanga port further diminishes Kenya’s revenue collection prospects through pipeline fees.

The refinery is projected to contribute $3.8bn annually to Uganda’s Gross Domestic Product (GDP), making it crucial for the commercialisation of Uganda’s Tilenga and Kingfisher oilfields to meet the oil demands of the Great Lakes region, including Kenya and Democratic Republic of Congo (DRC).

East African oil discoveries

Kampala discovered oil in 2006, six years before Kenya, whose oil prospects in Lokichar, Turkana County, still hang in the balance as it struggles to attract strategic investors to fund upstream activities.

British Tullow Oil, which previously held a controlling stake in the Lokichar, sold its assets this month to Kenya’s Gulf Energy for $120m after facing several setbacks, including withdrawals by joint partners Africa Oil and TotalEnergies and government delays in approving the Field Development Plan (FDP).

This exit, following the company’s financial losses in Kenya and broader strategy to streamline the portfolio, “increases the chances of the project proceeding forward”, according to Joe Gakuo, an independent oil and gas consultant.

Kenya must assume no other country has oil and do what needs to be done to take Turkana oil to market

The move alleviates Tullow from “significant capital exposure whilst retaining a material option on the future development of the project”, interim CEO Richard Miller said in a statement.

“In terms of crude oil exports, Kenya should not peg their project on neighbours. It must assume no other country has oil and do what needs to be done to take Turkana oil to market,” says Gakuo.

With the UAE expected to continue its expansion in East Africa, Tullow’s exit could provide Dubai investors an opportunity to partner with Gulf Energy to advance the project toward commercial exploitation, according to some observers.

Approximately KSh469bn ($3.62bn) is required for the commercialisation of the Turkana oilfield, which is estimated to produce 120,000 barrels per day.

“Financing for such oil projects uses both the company’s contribution and project finance debt. If they [Gulf Energy] need a strategic investor, their balance sheet is healthy. I am sure they might want to sell off some equity in the Turkana project,” says Gakuo.

Nonetheless, the UAE’s engagement in security dynamics in Africa has often come with controversies. In Sudan, for instance, the UAE is accused of funding the paramilitary rebel Rapid Support Forces (RSF) involved in mass killing.