Today's Paper

It’s make or break for Kenya oil dream

By Mbatau wa Ngai | Published Tue, June 12th 2018 at 14:59, Updated June 12th 2018 at 15:31 GMT +3
President Uhuru Kenyatta flanked by Deputy President William Ruto flags off the crude oil trucks during the Inauguration of the Ngamia 8 Early Oil Pilot Scheme, Turkana County

Last week’s flagging off of the first oil consignment under the Early Oil Pilot Scheme (EOPS) by President Uhuru Kenyatta gave the strongest indication that Kenya is well on the road to becoming an oil exporter.

The move is also a good indicator that some key steps are being taken to ensure the country avoids the so-called oil curse that has bedevilled other countries that stumbled on oil riches.

First, the Government has finally identified an audit firm to look into Tullow Oil’s books. This is important because Tullow will be allowed to deduct all its expenses from revenues earned from the oil exports.

But perhaps of even greater significance is the requirement that the audit firm trains the Energy ministry to carry out the audits without enlisting the services of consultants.

National dialogue

The importance of building capacity within the Government so that its staff can verify the volume of oil exported and the expenses incurred during the entire operation cannot be gainsaid because under-reporting of volumes sold and inflation of expenses is one of the ways multi-nationals deny nations their rightful dues.

Second, the Energy ministry contracted Wood Group in March to design the crude oil pipeline between Turkana and Lamu.

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The construction work is expected to begin mid-next year. Hopes are high that owners of land where the pipeline will pass through will opt for a share of revenues earned from the oil exports instead of insisting on upfront payments which are usually frittered away no sooner than they are received.

It is at this stage that the country needs to take a breather and have serious national dialogue to find out whether it is doing enough to reap maximum benefits from the fledgeling industry.

[Mbatau wa Ngai, [email protected]]   

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