Kenya Government ‘Cautiously Optimistic’ Of Commencing Oil Exports in 2017

The Government of Kenya  has said it remains cautiously optimistic of exporting crude oil from the lokichar basin by June 2017 having overcome the various challenges that remain including requisite infrastructure, storage and a new jetty according to chair Presidential Delivery unit head and deputy chief of staff in the office of the president Nzioka Waita.

_DSC0054According to Waita the process to upgrade the infrastructure is in top gear with contract awards to two contractors to be tasked with upgrading the Lodwar to Kitale road expected to be granted by end of June.

“Crude oil will be loaded on tanktainers at Lokichar by 06.2017 (initially 2000bbl/day) Tanktainers trucked from Lokichar to Eldoret. Crude oil will be transported via rail to Mombasa for storage and offtake,” says Waita.

Works on the road will include paving as well as widening shoulders to allow road transport of the 2000 barrels of crude oil expected to be exported during the early oil phase and stored at the existing refinery at Changamwe till sufficient amounts for loading are achieved.

“… at peak production, we estimate fiscal revenues generated from oil to be about $9bn annually. To put that in context, $9bn is about 16 per cent of Kenya’s 2013 GDP. It is enough to cover the cost of the Standard Gauge Railway line from Mombasa to Nairobi, ” Waita adds.

On the jetty Waita says works are ongoing to facilitate the dock that was construed to handle only imports can now cater for exports.

On road transport the deputy chief of staff added that the government had commitments for funding of an all-weather road from Lamu to Isiolo that will open up the north eastern frontier as well as allow security to be enhanced.

Among the major challenges according to the government to date include the skill gap to handle the industry demands, completion of the petroleum master plan, road and railway improvement as well as ongoing review of the upstream tax regime.

Others include the removal of fees by state agencies including the national environmental management authority (NEMA) and the National Construction Authority (NCA).

“We are working with over 100 vocational to ensure we increase the human resource and bridge the skills gap as demanded by the industry.”

Among achievements highlighted by the government include the creation of a fully operational steering committee, enactment of the Energy and Petroleum Policy & the Petroleum 2015 and Energy Bill 2015,

Ongoing activities include evaluation of bids for the FEED & ESIA, funding of pre-FID activities, joint development area agreements and project special purpose vehicle.

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