Kenya: Turkana Agrees to Oil Revenue Sharing Ratios

A police vehicle escorts trucks loaded with crude oil from Ngamia 8 oil fields in Turkana County on June 3, 2018.

Turkana Governor Josphat Nanok and Petroleum and Mining Cabinet Secretary John Munyes have asked local residents to allow the Early Oil Pilot Scheme to begin in June as scheduled. This was after they made a pact with President Uhuru Kenyatta and his Deputy, Mr William Ruto.

The two, from rival political camps, said they have united to soften their rigid stand and demands before Kenya becomes an oil producer.

Governor Nanok said they amicably agreed that the thorny issue was the capping of the share from oil receipts to the county, which was not supposed to exceed the national government's budget allocation to the county.

ACCEPT AGREEMENT

The leaders urged the residents to accept the agreement and allow the President Uhuru to flag off the first trucks transporting oil to Mombasa in June, by which time the country will have a legal framework to guide the extractive industry.

"The President told us that he will remove the capping clause on revenue as we had demanded, but told us to e reduce the share to the host community from 10 per cent to three per cent but we stuck to 7.5 per cent; we later agreed on 5 per cent for the host community." Mr Nanok explained.

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He said that the county also has a share in the 75 per cent that will go to the national government, adding that local members of Parliament and senators will fight for it. He described the agreement as the best they could have reached with President.

ENJOYING BENEFITS

The governor said that by allowing oil to leave the county, the community will start enjoying the benefits from oil when it lands in the market, even before a pipeline is built for full-scale production.

"The issues we, as leaders, and the community will be dealing with next with the Petroleum ministry are the land where oil has been discovered, and compensation for those who will be affected by the pipeline," Mr Nanok said.

Meanwhile, CS Munyes said the stalemate in Parliament over the Petroleum Bill 2017 has also been resolved.

"Lokichar residents are the ones living where oil was discovered. The trucks will start transporting oil to Mombasa in June and I urge you to welcome the President and allow the oil to leave," he said.

TULLOW OIL

The CS said that he will ensure that Tullow Oil Company clearly spells out clearly how its operations will benefit the local residents in areas where oil was discovered with regard to transportation jobs, formal jobs, corporate social responsibility as well as how the money in circulation will increase once production starts.

The agreement between the State and the top Turkana leadership comes barely three weeks after the elected leaders held a baraza in Lokichar, maintaining that they would not allow oil to leave the county unless the State assured them of 10 per cent of the receipts from oil for the host community, and 20 per cent for the county.

They insisted they wanted negotiations, especially with the President, before the Petroleum (Exploration, Development and Production) Bill became law.

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