Kenya's President Uhuru Kenyatta (right) with Momar Nguer, a Total executive at State House on January 23, 2018. PHOTO | PSCU
French firm Total SA has committed to invest in the
Lokichar-Lamu pipeline, boosting Kenya’s efforts to develop its own oil
fields and realise its ambition of joining the league of oil exporters.
The
deal was brokered in Nairobi on Tuesday during a meeting between
President Uhuru Kenyatta and Total’s executive committee member and
president for marketing and services Momar Nguer.
State
House spokesperson Manoah Esipisu said the French firm has been cleared
to buy shares in Maersk Oil blocks in Kenya after it committed to
developing the Lokichar to Lamu oil pipeline as the only evacuation
route for Kenya’s crude oil.
“Following Total SA’s
commitment, the government has consented to a proposed acquisition of
the issued and to-be-issued share capital of Maersk Oil Exploration
International (Mogas Kenya) in respect of Blocks 10BA, 10BB and 13T,”
said Mr Esipisu.
The deal represents an about-turn
almost two years after Total ditched the Kenyan route in favour of the
Uganda-Tanzania option for evacuation of crude oil from East Africa’s
oil fields.
It
also presents the East African region with the prospect of having two
crude oil pipelines, one running from Kenya’s Turkana oil fields to Lamu
Port and the other from western Uganda to Tanzania.
Uganda
and Kenya are the only countries with crude oil in the region. Uganda’s
proven recoverable reserves are estimated at two billion barrels while
Kenya’s is at 750 million barrels.
“Kenya is optimistic
that the entry of Total into the joint venture will strengthen the
financial resources and technical competence that is required to
accelerate the development of the resources in these blocks,” said Mr
Esipisu.
“President Kenyatta said his administration
would accord support to Mogas Kenya and Total SA, and indeed other
private sector players that are keen to develop the country’s resources
with the goal of delivering shared prosperity,” he said.
In
early 2016, Total opted for the Uganda- Tanzania route after it
expressed concern over the security of the infrastructure running
through the ‘wild’ North and northeastern Kenya.
Total was reportedly influenced by a security report compiled by an unnamed non-governmental organisation.
The
report is said to have warned of high risk of attacks by Al Shabaab
terrorists within the Kenyan territory, prompting Total to opt out.
Faced
with the prospect of an endless wait, Uganda later decided to build its
crude oil pipeline through Tanzania’s Tanga port, leaving Kenya to its
own devices.
Uganda and Tanzania launched construction
of the 1,445-kilometre crude oil pipeline last year with Total as one of
the three participating private firms.
Officials estimate that the $3.35 billion project could be ready by end of next year.
Kenya,
has on the other hand been toying with a short term plan to have its
Turkana crude oil transported by trucks and standard gauge railway to
Changamwe jetty before shipping to international markets.
Kenya
had initially set itself an ambitious target of getting its crude to
the international market before August 8, 2017 General Election but
later postponed the plan indefinitely over logistical challenges.
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