Uhuru's Oil Exportation Deal Disrupted
Kenya's hopes for an economic boost that was expected to start in 2022 was reportedly dampened after British oil explorer Tullow Oil moved the dates further.
On Tuesday, Tullow Oil announced that it had changed the earliest date when Kenya can expect to start reaping gains from the Turkana oil from 2022 to 2024.
The petroleum firm stated that it will take at least four years to reach the commercial production stage when Kenya is expected to start earning about Ksh150 billion from crude oil exports every year.
Kenya is yet to sign with Tullow Oil and its partners the critical Final Investment Decision (FID), without which financiers cannot commit to funding drilling, pipeline and other infrastructure projects required for the project.
Tullow Oil Kenya Managing Director Martin Mbogo stated that the firm will continue with its non-commercial Early Oil Pilot Scheme in the meantime to gather market and production data ahead of the large-scale production.
"We are going to make the Final Investment Decision next year and then we will take 36 months to complete the construction works before we start venturing into commercial production. Kenya will have added a new revenue earner bigger than even those it gets from tea exports," Mbogo noted.
At present, tourism is Kenya’s biggest revenue earner, grossing about Ksh157 billion in 2018.
Tea exports were valued at an estimated Ksh138 billion while horticulture raked in about Ksh124 billion.
Last week, President Uhuru Kenyatta announced that the country had sold its first 200,000 barrels of crude oil at $12 million (Ksh1.2 billion) to a UK based Chinese firm ChemChina UK Limited.
Kenya’s crude was sold at an average of $60 per barrel (Ksh 6,180) compared to the global trading prices on Thursday, August 15, which was $58 (Ksh 5,974).
Kenya discovered commercial oil in 2012 in its Lokichar basin, which Tullow Oil estimated contains about 560 million barrels in proven and probable reserves.
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