Davis Chirchir, the cabinet secretary for energy and petroleum, Kenya did not profit from oil prospecting in South Lokichar, Turkana County
CS  Davis Chirchir

According to Davis Chirchir, the cabinet secretary for energy and petroleum, Kenya did not profit from oil prospecting in South Lokichar, Turkana County. The CS said on May 24.

The purpose of the exploratory effort, according to Chirchir, who testified before the legislative Public Accounts Committee, was to determine if the substance was marketable and to provide the Turkana county administration with the appropriate training and resources.

He said the government owes International Exploration Companies (IOC) Ksh3 billion ($23.7 million) for the project.

According to the Act's rules, there were no extra funds to be distributed in this early oil project programme. If anything, the early oil project programme owes the IOC USD 23.7 million.

The South Lokichar Basin's crude oil has been generated via exploration and assessment efforts, and it was sold there. It was not an official production, according to Chirchir.

He added that the endeavour was still in the early stages of discovery; therefore, starting exploration came at a high cost, and there was no way to start turning a profit right now.

"When you consider the startup costs of any firm, you shouldn't anticipate making money for the first two to three years since those are subsequent periods of investment.

The CS said, "The project's early phase was costly since the goal was to make sure that there was an efficient procedure and an accessible marketplace for the oil.

The committee observed that, throughout the course of the exploration's four years, the government had extracted 240,000 barrels of crude oil, which it had sold for a total of Ksh3.7 billion, returning the money to investors.

However, Chirchir noted that there was nevertheless a chance that Kenya would gain from the project and that both the nation and the nearby villages would profit.

"Yes, there has been and will continue to be hope. I urge this House and all Kenyans to act promptly to support this initiative and be aware of the problem of climate change. Investors are not placing their money where their climate change policies don't align with the project developers," he said.

China, the globe's biggest supplier of oil and petrochemicals, dispatched officials to Tullow Oil earlier on Tuesday, May 23, to show interest in the project.

2019 saw the start of oil exploration as the Kenyan government granted Tullow Oil a permit to generate 100,000 barrels per day.

In the same year, former President Uhuru Kenyatta also declared Kenya's entrance into the oil export market with the intention of profiting from and making an average of Ksh1.2 billion from exporting 22,000 barrels of crude oil.


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