State to hire legal adviser on Tullow’s Turkana oil find

Workers walk past storage tanks at Tullow Oil's Ngamia 8 drilling site in Lokichar, Turkana County, Kenya, February 8, 2018. Picture taken February 8, 2018. [REUTERS]

The Government is recruiting an external law firm to help finalise an audit on the amount of money that Tullow Oil has spent on exploring for oil in Turkana County.

The law firm will work with Swale House Partners, which was selected in April last year to audit the expenses incurred by Tullow and its joint venture partners in Lokichar, to ascertain the firm’s assertions that it spent Sh200 billion between 2010 and 2016.

Tullow will recover the money once it starts producing and selling Kenya’s oil on a commercial scale by 2022.

The move to hire external lawyers could be a pointer to the limited capacity within different government agencies, including the Attorney General’s Office.

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It could also help the Petroleum and Mining Ministry avoid oversights and even blunders that could become costly in future as the country becomes an oil exporter.

“The objective of this assignment is to provide legal support to the Ministry of Petroleum and Mining on all matters emanating from the Petroleum Cost Recovery Audit,” said the ministry in a statement yesterday.

Swale House Partners has been auditing the expenditure incurred by Tullow while working on blocks 10BB and 13T.

The audit is also expected to give the ministry a clear picture on whether the firm has been meeting obligations set out in the public sharing contracts which specify minimum levels of investments it should make in exploration works as well as community projects. The audit is also looking into cost implications of the early oil pilot scheme, whose implementation began in June last year but has been dogged by challenges, including clashes with the host community.

Tullow, however, says it has moved 60,000 barrels of oil to Mombasa by road and will start exporting by June this year.

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GovernmentTurkana CountyTullow OilPetroleum and Mining Ministry