By Jevans Miyungu
The discovery of oil in Turkana promises to change dynamics as Kenya is a key player in regional political and economic development.
The find came at a time when Kenya and South Sudan were planning a crude oil pipeline from South Sudan passing through Turkana and destined to Lamu.
This, with prospects of oil finds on the Ethiopian side of the lake reinforces economic justification for the Lamu project, which has a crude oil pipeline, an oil export jetty and a refinery.
The construction of the $23 billion Lamu Port South Sudan Ethiopia Transport Corridor (Lapsset) has already begun. The project also includes a railway and highway linking Lamu to South Sudan and Ethiopia.
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The newly independent South Sudan plans to use Lamu as its main outlet for oil exports. The entire project is expected to be complete in 2015.
Turkana is also home to Africa’s largest wind farm. Construction starts in June and Lake Turkana Wind will consist of 365 wind turbines in northern Kenya. The $775 million project is waiting World Bank risk guarantees.
Initial site work will include building a 126-mile road that can withstand the heavy trucks that will transport equipment to the remote site that lacks infrastructure of any kind.
A 428-kilometer transmission line will also be built to link the wind farm to Kenya’s national grid.
The wind farm is expected to start production of the first 50 megawatts in mid-2014 and reach full capacity in early 2015.
Being a regional finance and transport hub, Kenya could take advantage of its oil discovery to pursue this status more actively. The country may lure international oil companies operating in other nations to its territory to set up their headquarters.
This could see a shift from Uganda to Kenya as the "capital" of East Africa’s oil industry. Uganda has already agreed to refine its oil as against exporting it in crude oil. Building the refinery is to cost the country roughly $1.6 billion.
The country has been in talks with their counterparts in the region to engage in a joint venture to build the refinery. The idea is to have the countries to buy a stake in government’s share as the refinery will be a public private partnership. It is likely that Kenya’s oil discovery now complicates those discussions.
Kenya may decide to export it just like Ghana does or still refine since it has a refinery at the port of Mombasa, which can process 70,000 barrels of oil a day.
For Ethiopia, the oil discovery in Turkana is of particular interest. The East African Rift Basin, where the oil was found, is divided between Kenya and Ethiopia. Ethiopia is expected to intensify its search along this side too.
However, Kenya stands to benefit, as land-locked Ethiopia, like South Sudan, will have little choice but to use Kenyan pipelines and ports to export its oil.
