Early oil export postponed to await new law

June 29, 2017 (4 weeks ago)
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Energy Cabinet Secretary Charles Keter says the decision was made after consultations with the leadership and Turkana community where oil has been discovered/KENNEDY KANGETHE

, NAIROBI, Kenya, Jun 29 – The early oil export plan by the Kenyan Government has been postponed by three months to await the passage of the Revenue Sharing Bill, which is pending before the Senate.

Energy Cabinet Secretary Charles Keter says the decision was made after consultations with the leadership and Turkana community where oil has been discovered.

The government had planned to start early oil export in June where trucks would ferry the crude some 1,089km from Turkana to Mombasa.

Revenue sharing has been a contentious issue between the government and the leadership of Turkana.

The original law had stipulated that the local people get five per cent of the revenue share, while the County Government receives 20 per cent and the National Government retains 75 per cent.

However, the locals have been fighting for 10 per cent revenue share.

“We do not want to start the export without having a clear picture of revenue sharing, we have to wait for the Senate to be formed, hopefully we start the export after the election and when we have a Senate to approve the Bill,” Keter said on Thursday.

Kenya’s current oil reserves are at 750 million barrels.

He says Tullow Oil and other oil exploring companies will continue exploring other places in the region in search for more oil as the country seeks to hit a billion barrels.

“We are 100 per cent ready to start the early oil export; everything is in place ready to go even now,” Keter told journalists in his offices at Nyayo House.

In March the government had given the go-ahead for Tullow Oil, Africa Oil and Maersk Oil to transport crude oil from Lokichar in Turkana to Mombasa, starting April.

The three companies under Kenya Joint Venture were to immediately start giving tenders to truck owners for the crude oil to be taken to the Kenyan Petroleum Refineries Limited in Mombasa ready for export.

The Early Oil Pilot Scheme (EOPS) is meant to help establish Kenya as a crude oil exporter and provide valuable information on the international market for Kenyan crude since the product is new in the global crude oil market.

EOPS will also help Kenya utilise the five existing wells to produce oil, with phase one targeting oil production of 2,000 barrels per day.

The beginning of the pilot scheme will also help Kenya develop further supporting infrastructure toward Full Field Development which includes LAPSSET (Lamu Port South Sudan-Ethiopian Transport) developments and a crude oil pipeline from Turkana to Lamu carrying between 80,000 to 150,000 barrels of oil per day.

The government’s plan is to have completed the construction of the pipeline by the year 2020 when it targets to hit the one billion oil barrels mark from the 750million barrels by 2016.

“We have finalised contracts for the construction of the crude oil pipeline from Lokichar to Lamu. Engineering designs and Environmental Assessment Contracts will be given by next month,” Keter revealed.

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