Business
Kenya on track to becoming East Africa’s first oil and gas explorer
A worker at the Petroleum Refinery plant in Mombasa, Kenya. PHOTO/Daily Nation
Kenya is headed to become the first oil exporter in East Africa, moving in less than five years from being a have-not nation to the regional leader in cutting reliance on energy suppliers such as Royal Dutch Shell Plc.
After Tullow Oil Plc., discovered oil last year, Kenya is set to start shipments in 2016, overtaking neighboring Uganda, where Tullow found crude more than seven years ago.
The explorer plans to start pumping in Kenya as soon as next year.
Kenya’s deposits may top 10 billion barrels, according to the company, more than three times the U.K.’s remaining reserves.
Exports will underpin Kenya’s shilling currency and are being pushed by a government that wants a lead on Uganda and Democratic Republic of Congo, whose East African resources in recent years attracted explorers such as China’s CNOOC Ltd., and France’s Total SA.
Most oil companies traditionally had focused on the African powerhouses of Nigeria and Angola to the west, and Libya and Egypt on the Mediterranean.
Oil will allow Kenya to “diversify export earnings and act as a catalyst for infrastructural spending, especially on the transport network,” Phumulele Mbiyo, regional head of macroeconomic research at Nairobi-based CfC Stanbic Bank Ltd., a unit of Standard Bank Group Ltd., said in an interview. “The shilling is expected to benefit from inflows of foreign exchange and reduced spending on fuel imports.”
