Kenya in Sh1.3bn oil export deal

President Uhuru Kenyatta chairs a Cabinet meeting at State House, Nairobi on August 1, 2019. PHOTO | PSCU 

In Summary

• President Kenyatta says move will grow the economy and help alleviate poverty
• Contacted, State House spokesperson Kanze Dena would not disclose the buyer. “Those details are not out,” she said.
• Last week, Kenya pumped 200,000 barrels of crude oil worth Sh1.3 billion as the country geared up to make its first, small-scale export

 

By PSCU
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Kenya Thursday joined the league of oil exporting countries after striking a deal of 200,000 barrels worth Sh1.3 billion.

“We are now an oil exporter. Our first deal was concluded this afternoon with 200,000 barrels at a price of $12 million,” President Uhuru Kenyatta announced.

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He expressed confidence that the oil trade would help grow the economy and end poverty.

“So, I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we eliminate poverty,” a statement from State House after a Cabinet meeting quoted President Kenyatta as saying.

Contacted, State House spokesperson Kanze Dena would not disclose the buyer. “Those details are not out,” she said.

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Kenya pumped 200,000 barrels of crude oil worth Sh1.3 billion as the country geared up to make its first, small-scale export.

The oil production statistics were disclosed by London-based Tullow Oil, which has exploration and oilfields in Turkana.

“(Some) 200,000 barrels of oil have been safely delivered to Mombasa. Tullow expects East Africa's first export cargo of oil to be sold and lifted in the third quarter of 2019,” the multinational said in its trading update.

The oil stocks were valued at Sh1.3 billion based on the international crude oil prices of about $63 (Sh6,500) per barrel.

The export is intended to test the international markets’ reception of Kenya’s low-sulphur oil ahead of commercial production, which is estimated to start in the second half of 2023.

Tullow has been moving the oil by road to Mombasa. It started moving about 600 barrels per day (bpd), but raised the volume to 2,000 in May.

The company says that the recent agreements it signed with the government and ongoing regulatory and infrastructural makes it confident that the project will be profitable even with low oil prices, but did not indicate the venture’s break-even price per barrel.

Last evening, State House said the President Kenyatta had also assured that the government will step up interventions aimed at containing the growing cases of cancer-related deaths in the country.