Energy ministry officials were, however, not available yesterday to confirm these figures. But the Energy Regulation Commission said oil exploration and drilling do not fall under its mandate. One of the Government officials who, was in the discussions leading to the Kenya-Tullow agreement, insisted this arrangement could not have changed because it was what the two parties signed before the exploration, which is a mega-billion shilling exercise, started.
Tullow Oil discovery is a breakthrough for Kenya, and an encouraging sign that some of the ongoing explorations could yield more oil wells. It needs to complete drilling of Ngamia-1 exploration to a depth of 2,700m, then carry out tests to ascertain the quality and quantity, something that will answer the question of whether the oil is commercially viable.
Initial tests indicate the oil has an API (measure of how heavy or light petroleum liquid is compared to water) greater than 30 degrees and that its wax-like the oil in Uganda and South Sudan. This means transporting and refining the commodity will not be a challenge because it will not require extreme heating.
Itâs after establishing the quantities that the next challenge for Kenya will start. Though so far Kenya has signed a revenue sharing agreement with Tullow Oil as part of the deal to ensure the company recoups its investments, the tendency for international companies to short-charge African governments has been seen in other countries just like the surge of international interests on a third-world country when it strikes oil.
The issues raised include contractual agreements with the drillers, governance issues, sharing of revenues from the wells, mining laws, policy gaps, and environmental protection.
Immediate former Commissioner of Mines Bernard Rop, who did his doctorate research in the area covering the basins where Tullow made the discovery, and has written several papers on the Turkana basin, cautions against early celebrations. "No one can ascertain the viability of the oil until they sink at least three more wells. This will also include sinking to the depth below 1,000m in each of the wells, an exercise that may take months," said Dr Rop.
If the wells are rich, there is the headache of dealing with the local community, who may not understand the details of the contract between Tullow and the Government, he added.
"To make sure that all the parties involved get to benefit from the oil, the attitude of the local community is important. In the contract the Government entered, issues such as environmental, land policy, and payment of royalties are considered," explained Rop. He has taken part in the signing of other local mining concessions.
It also emerged that oil discovery is covered under laws that experts warn are obsolete and cannot hand fair share to local stakeholders.
"We will need to have the logistics in place to enable the transportation and refining of the oil and these will cost a lot of money," said Energy Regulatory Commission Director General Kaburu Mwirichia.
George Cazenove, the Tullow Oil Company spokesman, sought to temper the excitement with a warning that the discovery had only put Kenya at the beginning of a long process to becoming an oil producer. This is the same message the President gave the country on Monday.
He gave the example of neighbouring Uganda where oil was first discovered in 2006, but has not yet reached the production stage.
