Audit report on lost pipeline fuel to be released

A long-awaited forensic audit to reveal oil dealings at the Kenya Pipeline Company (KPC) will be out in a few days.

A long-awaited forensic audit to reveal oil dealings at the Kenya Pipeline Company (KPC) will be out in a few days, according to industry sources.

The audit was supposed to take seven weeks but has instead taken almost a year, with the delay attracting more intrigue.

A local company that pushes for the interests of oil marketers, Supplycor Limited, last year wrote to KPC requesting an independent audit following the loss of over Sh1 billion worth of fuel.

It was not until February this year that Channoil Consulting, a British firm in the midstream and downstream oil and gas business, was contracted to do the audit.

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Supplycor Chairman Martin Kimani, who is also KenolKobil General Manager,  told The Standard that the audit was “95 per cent complete”.

“The exercise is about 95 per cent complete and should be (done) in a few days,” he said.

Kimani, however, declined to disclose any preliminary findings.

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“This will be advised as soon as the final report has been issued to avoid pre-empting the report and misadvising anyone, given the sensitivity of the matter,” he said.

When pressed, Channoil Consulting Chief Executive Dermot Campbell also kept mum on the findings.

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“There are strict confidentiality rules that we have agreed with our client that preclude any discussion about the work, any findings or client details. Unfortunately, we cannot provide any further details on this matter,” he told The Standard.

KPC chairman John Ngumi also said they were waiting for the audit report.

The audit will help determine if KPC, whose 90 per cent revenues come from transporting oil to the hinterlands, will compensate oil firms for pilfered or spilt fuel.

The company has an agreement with oil marketers that determines how compensation works, with the threshold liability being 0.2 per cent.

At a press conference last month, KPC Acting Managing Director Hudson Andambi had expressed dismay over the audit delay, disclosing that KPC had contributed some money to pay the contractor.

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The audit came on the back of failure by KPC to establish the amount of fuel lost in the new Sh48 billion Mombasa-Nairobi pipeline (Line 5) this year.

In June, thousands of litres of oil were stolen from the line in Mlolongo, Machakos County. Ten suspects, including two senior KPC security staff, have so far been arrested in connection with the theft.

KPC also terminated the services of the private security firm responsible for securing the pipeline’s right of way.

Also in March, oil marketers lost huge amounts of oil after a spillage in Kiboko, Makueni County on the same Line 5.

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KPCKenya Pipeline CompanyMombasa-Nairobi pipeline