18 May 2018

Kenya: 70,000 Barrels of Oil Ready for Kenya's Pilot Export

Kenya has already stored 70,000 barrels of crude in Lokichar, Turkana County in the north, in readiness for transportation to the Port of Mombasa by specialised lorries for exportation.

Principal Secretary Andrew Kamau said Kenya is now ready to export crude oil through the Early Oil Pilot Scheme (EOPS) citing the delay of Petroleum Bill 2017 as the only impediment.

He said Kenya hopes to start transporting oil from Lokichar basin in Turkana to the Port of Mombasa for shipment to the international market.

"We are ready to pilot, we are just waiting for the Bill because the oil is already in the tanks," he said. Kamau said the early oil exports would be followed by commercial production and exports after the pipeline is completed in 2021.

Revenue sharing

Petroleum Chief Administrative Secretary John Musonik said there is still a number of issues that need to be cleared pertaining the sharing of revenue as stipulated in the Bill.

"The issues of who gets what is still a problem because right now it (the Bill) states that the national government gets 70 per cent, 20 per cent goes to the county and 10 per cent to the community. But that still needs to be defined when operationalising some of these issues," he said.

The Bill, which outlines how the revenue is shared among sharing to the national government, counties and the community surrounding the oil resource must be passed before large-scale oil production can begin.

That however, is posing the greatest challenge after it was temporarily withdrawn last month following numerous changes made to it.

The Energy Committee proposed amendments to the contentious clause in the Bill to raise the sharing of petroleum resources to local communities from five to 10 per cent of the government share despite President Uhuru Kenyatta's rejection.

The President rejected the Bill that proposed a 10 per cent share directing Parliament to reduce it to five per cent.

Last month the Kenya Oil and Gas Working Group called on Parliament to better define the roles of the petroleum cabinet secretary, National Environment Management Authority and the Upstream Petroleum Authority in their submissions to parliament.

Mr Musonik said the ministry would transport 2,000 barrels of the crude oil daily to the Changamwe storage facilities.

The government plans to have the oil transported by road from Turkana to Eldoret for onward delivery by train to the Mombasa port -- a distance of 1,089 kilometres.

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