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Kenya refinery workers stop protest over possible closure

By Reuters | June 12th 2013

Workers at east Africa's only oil refinery sited on Kenya's Indian Ocean coast ended a protest on Wednesday after a meeting was convened to reconsider the possible closure of the facility.

They had earlier barricaded the entrance to the plant over reports it may be shut due to operational difficulties caused by old age and outdated technology.

More than 500 workers and contractors at the Kenya Petroleum Refinery Ltd (KPRL) had been joined by residents of the area to press the government to release a report on the facility's viability that was due to have been completed by the end of May.

Raphael Olala, Coast region secretary of Kenya Petroleum Oil workers union, said they stopped the protest after senior managers at the refinery were summoned by shareholders to the capital, Nairobi, for a meeting.

"That meeting had better come up with a palatable decision, because for a fact, we will not let this plant be shut down," Olala told Reuters.

This was the second such protest after the workers demonstrated last week.

"Currently we are operating with a lot of problems because workers are out protesting against an alleged intention to close the refinery," KPRL Managing Director Brij Mohan Bansal, earlier told Reuters by phone, urging the workers to return to work.

The workers union has vowed not to allow the closure of the refinery commissioned 50 years ago.

The refinery is run by India's Essar Energy, which co-owns it with the Kenyan government. Arpart from Kenya, it also serves Uganda, Rwanda, Burundi, Tanzania and parts of the Democratic Republic of Congo (DRC).

Fuel distributors have long complained about the quality of products from the refinery in the port city of Mombasa and want it shut so that they can buy cheaper and better imports from refineries of their choice. Under Kenyan law, they are obliged to buy fuel from the refinery.

Bansal said the refinery typically refines 4,500 tonnes of crude per day (about 32,000 barrels per day), but this had fallen to 2,500 or less due to reduced buying by oil marketers.

"We are not able to recover the costs of production," he said.

Essar has said it wants to raise $1.2 billion for a substantial overhaul of the plant. But the Energy Regulatory Commission (ERC) has said the refinery could be converted for a different use, including into a storage facility, if the proposed upgrade turns out to be too costly.

The refinery's managing director said in April after its upgrade and expansion, it would have a crude handling capacity to 4 million tonnes of crude per year (79,000 bpd) by 2018 from 1.6 million tonnes now.





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