Business
Kenya on track to becoming East Africa’s first oil and gas explorer
The Kenyan government under new president Uhuru Kenyatta, wants things to go faster.
“They are not drilling enough wells,” Kenyan Petroleum Commissioner Martin Heya said in a phone interview from Nairobi. “Uganda drilled a long time ago, but it’s possible that we can produce earlier than anybody else. We shall be happy.”
Tullow is facing delays in Uganda, where the government and oil companies are negotiating the terms of production after 1.7 billion barrels of oil were discovered. Oil from landlocked Uganda will eventually be exported through Kenya.
Ugandan President Yoweri Museveni’s government has delayed the US$10 billion investment planned by Tullow and its partners, Total and CNOOC, to tap the Lake Albert fields. The sides need to agree on the size of a local refinery and an export pipeline, which is likely to cross Kenya in 2018.
“Uganda missed the boat and Kenya will become the oil-sector hub,” John Small, CEO of the Eastern Africa Association, said in an interview. “It only makes real commercial sense to cooperate and have linked pipeline network” in the region.
In Kenya, Tullow and Africa Oil still have to submit their field development plan to the Kenyatta administration. Eventually, a pipeline will be built from the fields to a terminal on the Indian Ocean coast.
For the Kenyan economy it is going to be a major step forward. Once the export pipeline is completed they will have a significant influx of capital coming in from oil export revenues.
