Kenya buys Sudan oil, finally

August 22, 2008

, NAIROBI, August 22- Kenya will finally start to import crude oil from neighbouring Sudan, after the signing of a Memorandum of Understanding (MOU) between the two countries.

The deal signed by Foreign Affairs Minister Moses Wetangula and his Sudanese counterpart Deng Alor Kuol provides for an initial 500,000 barrels of crude per month coming from the oil-rich northern country.

The National Oil Corporation is now expected to enter into negotiations with the Sudan Petroleum Corporation on the modalities of delivering the crucial product to Kenya.

When the MOU is implemented, Kenya will become the third neighbouring country to purchase crude oil from Sudan.

Sudan has proven oil reserves of over five billion barrels, a majority of which is located in the south basins of Muglad and Melut. This makes it more preferable to Kenya, which enjoys strong relations with South Sudan, having brokered a peace deal between the South and the Khartoum government.

Oil production has risen steadily since the July 1999 completion of an export pipeline that runs from central Sudan to the Port of Sudan. In 2006, crude oil production averaged 414,000 barrels per day (bbl/d), up from 363,000 bbl/d in 2005. According to Angelina Tany, Minister of State for Mines and Energy, Sudan plans to be producing one million bbl/d of crude oil by the end of 2008.

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