Treasury secretary Henry Rotich said he has already drafted a proposed law to guide formation of a fund that will hold surplus proceeds of the oil resource for future use and avoid misuse
Kenya has set a target of drilling over 200 more oil production wells that will pour forth up to 80,000 barrels of crude per day as the government eyes early petrodollars.
British explorer Tullow and partners Africa Oil of Canada and French major Total have jointly sunk 40 wells in Turkana oilfields since 2012, positioning Kenya as a potential oil producer.
They have over the period hit an estimated recoverable reserves of 750 million barrels of crude, considered commercially viable. Now, the additional 200 wells are expected to draw a higher yield.
Treasury secretary Henry Rotich said he has already drafted a proposed law to guide formation of a fund that will hold surplus proceeds of the oil resource for future use and avoid misuse. “We are working with our private sector partners to develop the necessary infrastructure to evacuate and achieve early monetisation of our crude oil resources,” Mr Rotich said in his budget speech.
He added that works to install additional drilling facilities were ongoing. The planned scale-up comes after the country early this month embarked on an early oil export plan involving movement or small-scale crude by road to the seaport ahead of exports.
In early oil pilot scheme (EOPS), some 2,000 barrels of the commodity will be hauled per day to Mombasa by road —a 10-day roundtrip.
Oil looks set to diversify the country’s exports, boost hard currency inflows and ultimately make imports like cars and machinery more affordable.
“We have already completed the Sovereign Wealth Fund legislation, which will help us deal with the potential windfall of resources from the extractive sector and will also help us manage the resource responsibly for the current and future generations,” said Mr Rotich. Oil movement will be by road for about two years ahead of the construction of an 821-kilometre crude pipeline from Turkana to Lamu that will allow commercial shipments.
“As this is a commercially viable project, we plan to deliver it on a project finance basis without recourse to public debt,” said the CS.
“The government will, however, invest as a shareholder in the integrated project and will provide public sector facilitation as necessary.”