Kenya’s early oil plan steadily turning into white elephant project

The Early Oil Pilot Scheme announced by the Jubilee government is gradually turning into a white elephant project with only one per cent implemented.

MPs final report on the year’s budget said the petroleum and mining ministry are not likely to finalize projects within set times due to slow pace of implementation.

“The early monetization of oil project whose planned period of execution was 2011 -2022 is at 1 per cent completion as at May 31, 2021,” the Kanini Kega led Budget committee said in their report to Parliament.

British firm, Tullow Oil, shut the project after only one consignment of 240,000 barrels being exported yet the target was to export at least two consignments in two years.

The EastAfrican reported taxpayers have lost Sh200 million to the crude oil trucking scheme which consumed Sh1.4 billion and the loss is expected to grow further as another 100,000 barrels stored in tanks at the Kenya Petroleum Refinery Ltd in Mombasa will keep attracting storage charges for unknown period.

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Despite criticism that the project was doomed from the start, Kenya went on with it dismissing critics who poked holes in the viability of the endeavor.

The oil road and rail project trucked crude oil in iso-containers from Lokichar to Eldoret where the containers were transferred onto wagon flatbeds on existing rail systems.

At the Port city of Mombasa, crude oil entered Kenya Petroleum Refinery for storage to be pumped straight into export ships at the existing jetty in Kipevu.

Under the scheme, Tullow Oil expected to produce only 2 per cent of its oil reserves potential, a gross of 2,000 barrels of oil per day (bopd) which was far much lower than the potential of the Turkana find which will eventually produce between 80,000 and 100,000 barrels of oil per day.

Kenya Civil Society Platform on Oil and Gas released a report showing with the remoteness of the Turkana region, the only long-term economically viable option is a pipeline.

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