NAIROBI, Kenya, Sept 15 – Kenya is not ready to start exporting oil even if it has available oil for drilling.
KenolKobil CEO David Ohana says the country’s economy and infrastructure is not ready and it will be an extremely expensive venture to consider presently. The government’s plan has been to use road tankers as it firms up plans for the construction of an 865km crude oil pipeline from Lokichar to Lamu.
“Considering the price of crude oil currently, you can actually get cheaper crude oil elsewhere. No refiner will base their business plan on a crude that will be transported on road.”
Currently, data from the Energy Regulatory Commission (ERC) show that the price of murban crude oil in August 2017 is posted at US$51.60 per barrel, an increase of 6.17 percent from US$48.60 per barrel in July 2017.
Ohana, however, says that setting up refineries near the wells is a better opportunity for Kenya’s oil sector.
“It would be easier to set up refineries near the wells where they would supplying around East and Central Africa, but exporting crude oil, I do not think it’s very viable,” he added.
Kenya had greenlighted a crude oil export agreement with Tullow Oil, Maersk International and Africa Oil, with pilot exports slated to start in June this year in a major milestone for Kenya, which was put on the oil map with a massive 2012 discovery.
However, the government suspended the June 31 deadline for the first batch of oil to leave Kenya, until after the General Election.
Ohana was speaking during the third Annual East Africa Investor Conference organized by Renaissance Capital.