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Kenya’s oil plan on the right track

By Mbatau wa Ngai | September 17th 2019 at 01:00:00 GMT +0300

Kenya’s export of 200,000 barrels of crude oil to China, last month and the expected launch of Lamu Port underlines the country’s determination to take advantage of the stable market conditions.

This is in sharp contrast to Uganda whose contest with the Tullow Oil has not only affected operations at the Hoima Oil field but also the planned construction of crude oil pipeline to transport the commodity through Tanzania.

Tullow Oil, Total and the Chinese oil firm China National Offshore Oil Corporation (CNOOC) disagreement with the Uganda Revenue Authority (URA) has bolstered some Kenyan officials’ hopes that Uganda might be lured back on the negotiations table to build a joint crude oil pipeline to Lamu.

But whether these hopes are realised or not, Kenya would be best advised to continue on its current course that will see it exploit its full oil potential by creating a conducive environment for private investors in the sector.

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Hopefully, this will lead to the discovery of more crude oil in different parts of the country as the surveys indicate. This will ultimately lead to more revenues for the country than attempting to squeeze as much money from one or two firms at the initial stage.

Dubious history

Encouraging investors in the oil industry should not be at the expense of the host community, national interest or the environment. As experience elsewhere has demonstrated, this is a recipe for civil unrest and destruction.

This is why there are concerns that the Government is not moving fast enough to build the capacity of Kenyans to not only run the bulk of the industry’s operations but also to audit the firms on a daily basis because oil companies have a dubious history in much of the world.

The result is that the only countries that seem to benefit from a surfeit of oil revenues are those that monitor the oil firms’ operations closely to ensure all the parties get their rightful shares.

SEE ALSO: Mombasa court allows demolition of Pwani Oils' Sh182 million investment

The nationals’ responsibility to their country begins early during the negotiations that lead to the granting of exploration agreements.

This is where the country should ensure it is represented by the best minds available even if it means the hiring of reputable negotiators from outside the country.

But signing an equitable agreement should never be seen as an end in itself, but as a means to achieve the desired results. This will only be realised when those expected to protect their national interests do their work as expected. The hiring and training should also be done on merit and staff well remunerated.  

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Oil Crude oil Lamu Port Tullow Oil Turkana Oil
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