September 22, 2017

Kenya postpones crude oil export launch

Kenya has shelved plans to carry out an experimental crude oil export, after realising that some basic requirements had been omitted, the country’s energy and petroleum secretary, Charles Keter has announced.  

Keter said the government had decided to stop the plan awaiting the conclusion of the Petroleum (Exploration, Development and Production) Bill 2015, which got stuck in the senate after President Uhuru Kenyatta sought to reduce the revenue share meant for the local community from 10 to five per cent, according to the Daily Nation, a Kenyan Newspaper.

“After consultation with the local leaders and the community, we have decided that instead of having the project commence this month, we will defer it until the Bill, which is pending before the senate and as you are aware that can only pass after we have the next parliament.”

Observers have questioned the rationale of the move, just three months after the government has signed a Sh1.5bn contract with three companies – Oilfield Movers, Prime Fuels Kenya and Multiple Hauliers – to transport crude oil from Turkana Oil fields to Mombasa.

If the government does not rescind its decision, the companies that have been contracted to carry out the project will have to be paid without even breaking a sweat.  

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