Early Oil Pilot Scheme Shelved Awaiting Petroleum Bill Passing

The much anticipated early oil pilot scheme project expected to commence later this month has been suspended indefinitely until the new senate passes the Petroleum (Exploration, Development and Production) Bill, 2015. Speaking in a press conference in Nairobi ministry of energy and petroleum secretary cabinet secretary Charles Keter said that the government has decided to shelve the project until there is necessary legislation to enable the production and exportation of crude oil.

Keter disputed that the suspension had been occasioned by the rising insecurity in Turkana that has for weeks threatened transportation in the region.

Pundits also say the rising temperatures due to political campaigns that have seen the county demand for a greater share of oil revenue could also be a reason a fact disputed by the cabinet secretary. The bill outlines revenue sharing between national and county governments as well as with the local community.According to Keter several issues need to be ironed out such as who to hold the set aside monies for the community in trust issues to be ironed out by the energy legislation.

“It is an election period and people garnering for leadership can say anything. That is why we thought to ensure that the project is not hijacked by such individuals it is the right decision we hold the project for another two to three months for the bill before parliament so that no one can say the government is bulldozing or arm-twisting the local community,” Keter told journalists.

To date Tullow Oil has 70,000 barrels in storage in Turkana available for transportation with more oil expected to be produced later in the year during the extended water flood pilot test in Ngamia.

Three companies had already been awarded the contract to transport 2000 barrels a day including Prime Fuels, Multiple Hauliers and Oilfield Movers.

Despite the project being loss making the government has said the EOPS is an enabler and not a replacement for the Full Field Development (FFD), which will include amongst other LAPSSET (Lamu Port South Sudan Ethiopian Transport) developments, a crude oil pipeline from Turkana to Lamu carrying between 80,000 – 150,000 barrels of oil per day.

“We have other activities that are running our base basically is unimpacted, zero impact with the position we are in today. We are confident we are picking up on this on a future time,” Says Tullow Oil Kenya CEO Martin Mbogo.