254News

News Beyond News

Kenyans implored to continue waiting for oil gold; Prediction set at 2025

4 min read
Spread the post

There are certain tale tell signs that you can easily pick up from bank tellers when you happen to be that bank’s regular customer, a faithful member of the queue.

You get accustomed to these body cues so as to maintain your sanity. Picture yourself in a long line of equally impatient people, waiting to be served in a poorly ventilated bank. Everyone is edgy and loud, flailing their arms in annoyance and waving haggard bank magazines across their faces in a futile attempt to cool off. You might even wind up sandwiched between two people who are yet to master the art of issuing personal space. Your breathing is labored, your body clammy and your patience is teetering on thin ice. The thing is, you can’t leave, you need to reach the counter and satisfy your needs, so you have to wait. In the process of crouching, standing on one leg, moving your upper body and standing eerily still, the bank teller suddenly begins to rub their temples; that is usually the first sign, a sign that they are all going out for a two-hour lunch.

For some reason this usually happens when your turn is near or when you are literally about to be served. Sometimes two hours stretch and become three. By the time they are back, no one is edgy and loud anymore. Everyone is quiet, contemplating, tired and defeated. Waiting for a long time for something can do that to you.

Ever since the discovery of oil (in bounty) in Turkana, Kenyans have been waiting to reap the benefits of this natural resource. It was meant to be a boon in the economy, a game changer to the rampant unemployment and multiple people living below the poverty line. Talks of mining and exporting sent exciting shivers amidst the people, that discovery was a glimmer of hope. Year after year, the glimmer continues to flicker, threatening to disappear altogether. It almost did this year when Tullow declared a force majeure notice on the Kenyan government in June.

Tullow Oil PLC is a multinational gas and oil exploration company founded in Tullow, Ireland. Its headquarters is based in London, United Kingdom. The British Oil Company has interests in over 70 licenses across 14 countries with 28 producing fields. In a report compiled last year, the company is said to produce 86, 800 barrels of oil daily. With a reputation like that, the company is bound to get contracts from multiple countries all over the world.

Tullow entered Kenya in 2010 after signing agreements with African Oil and Centric Energy to gain a 50% operated interest in five onshore licenses. In 2012, it began its exploration and appraisal of oil drilling in Kenya. The Ngamia-1 (the oil project name) exploration successfully encountered 200 meters of net oil pay during the same year. This opened doors for more discoveries across the Turkana region. Things were looking bright and shiny for the country as the Tullow company, the Kenyan government and the Turkana community worked hand in hand in realizing this oil exporting dream. This dream was to be realized in 2021, now Kenyans are hearing talks of 2025. This is only months after Tullow issued a force majeure notice to the Kenyan Government.

So when exactly did things start looking bleak and what is the stated progress as of now?

Tullow company issuing a force majeure in June

A force majeure notice is issued when a company is unable to meet its obligations in a contract due to unforeseen natural ordeal such as calamities, floods and famine. The British Oil Company declared this notice following the COVID-19 pandemic this year.

China had immediately stepped forward with a buying offer of the whole project once this notice went public.

This notice was not taken kindly by the Kenyan government which had worked for years (and devoted money and effort) to realize this oil exporting dream. The British firm had been struggling financially and the pandemic happened to provide the perfect exit strategy. This proved to be a difficult move as the Kenyan government declared war against this notice.

Members of the Parliament called for a forensic audit against the company which was meant to comb through Tullow’s questionable financial expenditures. Legislators also boldly questioned the $2.04 billion the British company was demanding from the government as compensation since their drilling projects started in 2012.

It was later discovered that Tullow had spent $1.6 billion during the time they spent exploring oil in Turkana.

Kenyans implored to continue waiting for oil gold

Last month, Tullow lifted its force majeure putting this war to bed. The news was a cause of elation because it meant that the government would not be going back to the drawing board. This excitement, however, was short-lived when Kenyans heard about the new projected year of accruing oil billions.

The 2025 oil exporting prediction
The government recently extended Tullow’s exploration timeline. On Wednesday, the British firm announced that it had been given another fifteen months to explore oil in the Turkana region. This means that the production and Financial Investment Decision (FID) timeline has also been moved.

The company said that the added time was part of the reason of them lifting the force majeure notice. Tullow’s net earnings suffered a huge loss of $ 1.3 billion. This means that the company and the government will have to look for funds so as to build a pipeline. This will happen after the FID has been made. At this rate, the first yields of Turkana oil are set to be seen in 2025.

We can’t help but sympathize with the investors who had put their eggs in this oil basket.

Kenyans cannot help but feel that they are in a long queue waiting for tellers who went on an eerily lengthy lunch break.


Spread the post

Email your news TIPS to info@254news.co.ke to get your article published.

Leave a Reply

Your email address will not be published.