Kenya: Activists Want Details on Oil Contract with Chinese Firm

Workers put final touches on the Western Kenya Pipeline Extension Project (file photo).

Kenya has exported its first shipment of oil, worth about $12 million, under a deal with the Chinese petrochemical company, ChemChina. Members of a civil society group are demanding transparency, calling on the Kenyan government to show how the Chinese firm won the bid to buy the oil and how much revenue the country is getting from the sale.

After years of exploration, Kenya exported its first crude oil shipment last month.

Amid the excitement of Kenya joining the list of oil-producing countries, some civil society groups are accusing the government of keeping oil deals with a Chinese company secret.

Charles Wanguhu is the coordinator of Kenya Civil Society Platform on Oil and Gas (KCSPOG) a lobby group that works around the issues of oil and gas. He says they want to know whether the country is getting the best deal for its resource.

“The challenge that is ongoing in the sector is a lack of proper disclosure," said Wanguhu . "So the ministry indicated there was abiding process of the oil but we have not had access to any of the bidding documents, for example on which other companies bid for the oil and how much they bid for the oil so by the time they got ChemChina, which was the eventual buyer, we were asking for a more transparent process of these biddings that we could say the country got the best deal.”

Kenya’s principal secretary of petroleum, Andrew Kamau, says the information the government provided on who bought the oil and how much they paid was enough.

“It is not a fair comment," said Kamau . "We told them who bought it, how much they bought for it and the volume.  What more would you want? You know people have all sort of phobias so I can’t really speak to that.”

The ministry was also reluctant to share how much was spent in the oil exploration.

China has helped Kenya to build roads and standard gauge railway line running into millions of dollars.

Wanguhu says he fears for the future if China will be the primary oil buyer from Kenya.

“The challenge is that we have a significant amount of debt that has been accrued to China in the building of infrastructure around the SGR and so its significant when you see that if our oil is going to China then the risk falls that if we are unable to service our debts that we might get into an agreement that might not be suitable for the country," said Wanguhu .

Hellen Odegi, an oil and gas expert, says history does not favor Kenya when it comes to managing public resources.

“The side I would be worried [about] is because of the history we have had in Kenya of misuse of resources, so that we don’t find ourselves facing another issue like what we have seen in the past two-three years, where massive amount of money being lost in counties and national government so that we don’t make money and it's going to the pocket of two companies only," said Odegi.

Kenya currently produces about 2,000 barrels of oil per day.

Last month, oil explorer Tullow said that production could rise to 100,000 barrels per day by 2024.

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