Businesses across Kenya last year made Kshs 8.2 billion in revenues from supplying services to Tullow Kenya and contractors carrying out oil exploration in the country, a report released today by the firm says.
Kshs 4.1 billion came from supplying Tullow Kenya directly, representing an increase of nearly 60 percent compared to 2012, and was in addition to the Kshs 1.9 billion the company paid in taxes to the Government. 70 percent of the company’s staff is Kenyan, as are nine in every ten employees engaged by its contractors.
Welcoming the report, Tullow Kenya Country Manager, Martin Mbogo, said the oil discoveries made by Tullow over the last two years had put Kenya at the heart of East Africa’s emerging oil province and that the report, which will be updated regularly, was proof of the company’s commitment to ensure that ordinary Kenyans benefited from the growing oil and gas sector.
“As the statistics demonstrate, Tullow is making significant efforts to expand its supplier base in Kenya and to provide greater opportunities for local entrepreneurs,” he said.
Mr. Mbogo said Tullow Kenya was working to increase the share of revenues taken up by Turkana based firms. “Our strategy is to ensure that wherever possible, goods and services are sourced locally, creating new jobs and supporting the local business community and economy,” he said.
According to the report, in 2013 Tullow Kenya and its contractors spent over half a billion shillings on businesses based in Turkana County where operational activities are taking place, with the most recent figures indicating that they had generated over 3000 jobs, three-fifths of which went to residents of Turkana.
“We are investing in several programmes that aim to build capacity among Turkana businesses to take advantage of this,” he added, noting that as the country transitioned from oil exploration to development and production, opportunities would increase.
“The welfare of the communities we work with is a crucially important aspect of our operations and we will also continue to invest in the people of Turkana to enhance the necessary skills to take up more of the opportunities created by the oil and gas sector,” he said.
According to a report prepared by the Kenya National Bureau of Statistics and the Society for International Development, as many as 82% of the county residents have had no formal education. Tullow Kenya is investing in efforts to build capacity in the local school system and has over the past two years provided over 3,000 bursaries and scholarships to students as well as teaching materials to 50 primary and secondary schools.
Under the Tullow Group Scholarship Scheme, the company has also spent approximately Kshs 125 million to help 25 Kenyan students, including seven from Turkana, pursue post graduate qualifications in fields related to oil and gas.
“Developing oil resources is a long term venture which demands large initial capital investments and, as the sector matures, it creates many more opportunities. Kenya is still in the budding stages of this cycle, but has shown great promise for future rewards,” he said.
The report states that following the discovery of significant oil volumes in Turkana County, an agreement has been reached with the National Government in consultation with the County Government of Turknana to commence studies for further development, including the building an export pipeline, expected to start within two years time.
A subsidiary of Tullow Oil, Africa’s largest independent oil and gas exploration and production company, Tullow Kenya acquired its first operated interests in the rift basins of Kenya in 2010. The first exploration well was drilled just 18 months later and since then, the firm has discovered an estimated 600 million barrels of oil resources in Turkana.
Tullow Kenya is the Operator of Blocks 10BB, 10BA and 13T covering parts of Turkana County with a 50% participating interest while its partner Africa Oil Corp holds the remaining 50% interest.