Kenya woos S/Sudan after pipeline deal with Uganda collapses

04 May 2016, Nairobi – Kenya is reviving its deal with South Sudan in which the latter will export oil through Lamu Port. This is aimed at increasing use of the Lokichar-Lamu crude oil pipeline.

Oil pipeline

Oil pipeline

The move comes after the collapse of the Uganda deal. However, experts warn that Kenya could find itself in a difficult situation again saying Total, which killed the Uganda deal, is the main holder of the majority of oil blocks in South Sudan.

Petroleum Principal Secretary Andrew Kamau said by phone that Kenya will begin talks with South Sudan to have it export oil through Lamu.

“We had a deal with South Sudan before Uganda requested us to delay construction of our pipeline so that we could do it together. We will now move forward with plans mooted in 2012 that will see South Sudan connect to our pipeline,” said Mr Kamau. “We are left with two years of work to hit production, we now want to initiate talks with South Sudan.”

With tactMr Joe Nyaga, the head of projects at Northern Corridor summit where Kenya, Uganda, Rwanda and South Sudan are members, said that, “Kenya must approach the South Sudan deal with tact since majority of oil blocks are owned by Total.”

French firm Total is behind Uganda’s involvement with Tanzania in the crude oil pipeline. The firm owns oil blocks in Congo, Uganda and South Sudan, and would be interested in having all its resources together transported through the Port of Tanga.

Total has stake in a 120,000km² concession in Jonglei state, South Sudan with interests in more oil blocks in the country.

The blocks are however closed with activity going on in Upper Nile state only, several months after violence began between groups loyal to President Salva Kiir and Riek Machar, who is now vice president after a peace deal was brokered.

The violence that has rocked oil rich South Sudan is seen as a hindrance to effective oil production as majority of oil blocks are usually closed when the turmoil is at its peak.

Kenya is nonetheless carrying on with its earlier contract with South Sudan to have the latter export 160,000 barrels of its crude oil per day through Lamu.

Kenya is bound by South Sudan through a Memorandum of Understanding (MoU) signed in 2012 through the Lamu Port South Sudan Ethiopia Transport Corridor. The deal was to set the pace for Lamu Port to be used as an export point for South Sudan crude oil.

Mr Nyaga however said there is no guarantee that the Juba deal will come to Kenya. He noted that if all considerations are put together, it would take Kenya “too much negotiations” to have South Sudan oil exported crude through Lamu.

– Daily Nation
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