State shelves early oil pending approval of Petroleum Bill

Business Daily Kenya:  The government has shelved plans to transport crude oil from Lokichar to Mombasa under the Early Oil Pilot Scheme u...

Business Daily Kenya: 

Roads key to Turkana oil take-off.

The government has shelved plans to transport crude oil from Lokichar to Mombasa under the Early Oil Pilot Scheme until the 12th Parliament is constituted.

Energy Cabinet Secretary Charles Keter, who had set a June deadline for commencement of the project, which was to transport crude oil to storage facilities at the Kenya Pipeline Refineries Limited (KPRL), says it now has to wait on account of the Petroleum Bill pending at the Senate.

The bill outlines sharing of revenue which Members of Parliament had proposed at 10 per cent share for the community, 20 per cent for the county government and 70 per cent for the national government.

But Parliament dissolved before conclusion of discussions affecting the Early Oil Pilot Scheme in which the Ministry of Energy, Tullow Oil and other partners plan to transport up to 150,000 barrels of crude oil per day from Turkana “After consultations with leadership of Turkana, we decided to defer the Early Oil project until the Petroleum Bill – which is before Senate – is finalised,” Keter said in his office yesterday.

“It will take one month for the discussions to commence,” he said.

Once in Mombasa, the crude finds its way to international markets for sampling by potential buyers, a move that would launch Kenya into the league of oil producing and exporting countries.

According to the CS, replacement of Kainuk Bridge which bestrides Turkwel River into Turkana is going according to plan. In the absence of a pipeline, the bridge, a critical project in rehabilitation of the 300km Eldoret–Kitale–Lokichar-Amosing road,is considered the main road for movement of tanktainers to Mombasa.

Rehabilitation of the road between Eldoret and Kitale onto Lokichar is ongoing as Tullow Oil and other partners put up other necessary infrastructure for the project.

The CS also confirmed that the ministry had already awarded a tender for the Environmental Impact Assessment (EIA) of a pipeline from Lokichar to Lamu.

“We will award a contract for EIA for construction of the pipeline any time soon. Probably next month,” he said.

Construction of the 865-kilometre pipeline between Lokichar and Lamu was estimated to be completed in the second quarter of 2021 at a cost of Sh210 billion.

The CS downplayed security issues which analysts consider a major impediment to operations, in an area traditionally  known for frequent security concerns.

“Insecurity incidences have been there even before the pipeline, but some people could be taking advantage of this situation, that’s why we think we would rather hold on for about two or three months to first let the elections pass,” he said.

The post State shelves early oil pending approval of Petroleum Bill appeared first on Mediamax Network Limited.

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