Tullow Oil counts Sh400m loss in Turkana standoff

Workers walk past storage tanks at Tullow Oil's Ngamia 8 drilling site in Lokichar, Turkana County earlier this year. No crude oil has left the site since mid-June. [File, Standard]
Tullow Oil has lost Sh400 million following halting of its operations in Lokichar, Turkana County for almost two months after a standoff with the local community.

The Petroleum and Mining Ministry, however, said yesterday the impasse, which resulted in the firm shut down all activities, including trucking of crude oil to Mombasa, had been resolved despite uncertainty on the ground, with local leaders saying the opposite. (See separate story in Financial Standard)

Cabinet Secretary John Munyes at a briefing in Nairobi said the firm had resumed operations and was making preparations to resume the trucking of crude oil to Mombasa next Wednesday.

“Money to the tune of Sh400 million has been lost,” said Mr Munyes.

“Tullow has resumed operations. They have restored some of the social amenities that suffered after the stoppage of operations. Other technical operations have also resumed in preparation to restart trucking which will take place on August 22…. It has taken us 45 days because we wanted to get it right. We would not like to see another stoppage.”

Increased security

He said the ministry is in the process of setting up an inclusive system to handle grievances such as those that made the community resort to protests. The CS said the company and ministry would work together to recover the time lost over the one and a half month, noting that the standoff had been a costly affair as it saw Tullow continue spending on leased equipment as well as other ancillary services.

The community led by area parliamentarians and ward representatives had been demanding increased security in the area.

The protests began a few days after the June 3 flagging off of the first trucks moving oil from Turkana to Mombasa under the Early Oil Pilot Scheme.

This led to halting operations by Tullow Oil, which they could not guarantee security for its employees.

The Ministry has set-up a two-tier grievance management system, which will comprise a committee in Turkana to handle issues raised by the community and another committee at the national level to handle issues escalated by the county committee.

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Tullow OilTurkana CountyPetroleum and Mining MinistryEarly Oil Pilot Schemetullow oil company