Trucks loaded with crude oil from Lokichar headed to Mombasa. Tullow Oil
last week resumed transportation of crude oil by road from the Turkana
oilfields to Mombasa after reaching a truce with the local community.
PHOTO | JARED NTAYAYA | NMG
British firm Tullow Oil last week resumed transportation of
crude oil by road from the Turkana oilfields to Mombasa after reaching a
truce with the local community, which had disrupted the Early Oil Pilot
Scheme over unresolved resource-sharing concerns.
Transportation
of crude oil was stopped in June due to security concerns after
protesters blocked roads and disrupted operations in the South Lokichar
oilfields.
Tullow Kenya managing director Martin Mbogo
said four trucks left Turkana for Mombasa with 600 barrels of crude for
storage pending export later next year.
"Incremental transport will follow, targeting 2,000 barrels a day in the months to come," he said.
The
resumption of operations came after meetings at Kalemgorok, Lokichar
and Nakukulas trading centres during which representatives of from the
Petroleum Ministry, Tullow and Turkana County urged residents to allow
the EOPS to continue as their grievances were being addressed.
These
issues include local content in procurement of goods and services by
Tullow, benefits accruing to the community when Kenya starts crude
production, and a dispute resolution mechanism.
Loss
Petroleum and Mining Cabinet Secretary John Munyes said Tullow and its partners lost $40 million when the trucking stopped.
The government established a two-tier dispute resolution mechanism and extensive stakeholder consultations which took 45 days.
In
a Kenya Gazette Notice signed by Head of Public Service Joseph Kinyua,
two taskforces were formed to look into the community’s concerns.
The
Turkana Grievance Management Committee will look into issues that may
impact residents regarding crude operations while the Inter-Ministerial
(Escalation and Support) Committee will address national issues.
Turkana
South Member of Parliament James Lomenen said the discovery of crude
oil raised expectations of residents because poverty is rampant in the
area and the region has lagged behind in development for many years.
"The
government has put in place a mechanism to manage community’s high
expectations. We agreed the operations could resume but government and
Tullow to listen when issues are raised to avoid protests in future," he
said.
Tullow will reach a peak of 2,000 barrels daily
in 2019 before the final investment decision is made for crude exports
to start in 2022 after building of a pipeline to the Lamu port.
Tullow has spent $2 billion on exploration activities at block 10BB and Block 13T.
Sources
said Tullow, Africa Oil and Total signed agreements with Kenya that
allow the firms to recover exploration and development costs once
commercial output starts capped at 60 per cent of oil produced over
several years.
The remaining 40 per cent will be shared
with Kenya based on a daily rate of oil production (DROP). The
government will receive 50 per cent of first 20,000 barrels.
Kenya’s
share of the next trance of 30,000 barrels of crude oil is 60 per cent,
followed by 63 per cent of the next level of 50,000 barrels, 68 per
cent for a trance of 100,000 barrels and 78 per cent of over 100,000
barrels.
The government and exploration firms will each
get 50 per cent of revenue from hydrocarbons when R-factor is less than
1. Kenya will take 65 per cent of the revenue if R-factor is equal to
or greater than 1 and less than 2.5.
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