Kenya poised to become oil exporting country
From June 3rd, oil will be extracted from the subsoil of Turkana, in northern Kenya, and transported by truck to the port of Mombasa on the coast.
A development that occurs almost 30 years after the discovery of oil in this area and while the project was causing tension.
It is an agreement between the central government and the county of Turkana that has unlocked the situation. Oil revenues will be shared: 75% for Nairobi, 20% for the county and 5% for local communities.
This compromise puts an end to several months of tension. The inhabitants of Turkana feared to be left behind. Some even threatened to block convoys of crude oil. As of June 3, 2,000 barrels will be extracted every day from the Lokichar basin and transported by truck for nearly 1,000 km to the port of Mombassa.
In 4 years, the 750 million barrels contained in the subsoil of Turkana will begin routed to the coast by a pipeline financed mainly by the French group.
According to one economist, the project makes sense, even if it involves risks. “These exports will bring in revenue that will help recover the country’s large public debt. But eventually, a problem of profitability could arise,” says the expert.
Indeed, Kenyan oil is located far from the coast. Viscous, it will heat it during its routing and it will be expensive to export.
In addition, the country’s reserves are too low to allow Nairobi to weigh on the sector. Kenya will therefore be at the mercy of market fluctuations. “Hence the interest of starting to extract it now, as prices go up,” says an analyst.