03 February 2014, Nairobi — Despite issuing an oil prospecting license to Tullow Oil, Kenya is yet to start oil production at a commercial scale, it has been established.
This has denied the country billions worth of foreign currency in revenue generation.
CAJ News Kenya visited the responsible communication departments for both the Ministry of Energy and Petroleum and National Oil Corporation but could not be granted an immediate interviews with the Principal Secretaries, who demanded that a letter be written first requesting an interview at a later date.
Last month, Tullow Oil announced the discovery of more oil at the Amosing-1 and Ewoi-1 exploration wells in Block 10BB onshore in northern Kenya bringing the total discovery to 600 million barrels of oil (mmbo).
Tullow Oil stated that the overall potential for the basin, which they expect to be fully assessed over the next two years through a significant programme of exploration and appraisal wells, is in excess of one billion barrels of oil.
With the current crude oil price, the government has predicted annual oil revenue of US$ 300 million.
However, this may not be achieved until the lapse of another three years or so since the legislative and infrastructural development are yet to be put in place in order to allow for commercial production of oil.
The Energy Bill is yet to be finalized and upon its enactment into law, will be the first time the country renews its energy laws since 1986.
Among the key areas addressed by the bill are fossil fuels, renewable energy, electricity and devolution and access to energy services.
With a GDP of US$ 40 billion and an annual budget (2013-14) of Sh 1,64 trillion (US$ 19.3 billion), an injection of an annual revenue of US$ 300 million from oil exports would be much welcome to the Kenyan economy, which the International Monetary Fund (IMF) has termed as a frontier economy.
Once the country commences commercial production of oil, it is expected that its contribution to the country’s gross domestic product will rival that of agriculture which was 24.2 percent as at 2012 according to the Kenya National Bureau of Standards.
– CajNewsAfrica
