Turkana oil find a blessing that calls for restrained celebration

After many past disappointments, it can now be said that Kenya has commercial quantities of oil, and this is great news for this nation; investors and the people of Turkana County.

Optimism was always there that Turkana was a good bet, based mainly by the geological similarity between the Turkana Rift and the Lake Albert Rift in Uganda where Tullow is now developing oil fields while prospecting for more oil. Tullow has had similar successes in Ghana

The quantity of oil as indicated has a “height” of over 20 metres (which is a good number) which when multiplied by the area of the well surface  provides a rough estimate of oil reserves available in that particular well/reservoir .

The quality of oil is described as light, which means it has more of the valuable products when refined.

However, we shall wait to learn more about its “waxy” nature, for wax can negatively affect pumpability of crude oil.
Quality of oil from one well could be different from that from another well, and as such the “average” quality can only be known after more wells are drilled and evaluated.

Kenyans will, of course, be jubilant that the era of cheap oil is coming... Being an inland oil find, it will take no less than three years to develop the necessary infrastructure for oil production, pipelines and refinery to make products .

The Mombasa refinery is understood to have technical problems handling waxy crude oils unless the process units are modified. 
It is a major coincidence that we have recently been talking about a crude oil pipeline from South Sudan passing through Turkana and destined to Lamu.

The Turkana oil discovery, coupled with prospects of oil finds on the Ethiopian side of the lake, will reinforce economic justification for the Lamu project which has a crude oil pipeline, an oil export jetty and a refinery. 

It should not come as surprise if Ugandans connect to the same pipeline to Lamu, making it a true trans-national pipeline with many ready investors.

Kenya has recently gained experience from Uganda on what to do and what not to do in respect of new oil finds.
To ensure fast monetisation of the oil Kenya will need to ensure that correct policies, laws, regulations and institutions to manage the newly found resource are in place.

The public should also note that the Constitution has included parliamentary approval for natural resource agreements.
However, public expectations will need to be managed while keeping politics and activism to a manageable minimum.

Transparency and accountability should be the guiding words from the very start.

Consumers have in the past been protesting about high global oil prices. However, it is worthy noting that it is the high global oil prices that have sparked renewed interest in investors taking risks in Kenya, an area previously labeled as marginal frontier.

Success beckons success, and with the Turkana oil find, and as long as global oil prices remain above $100 per barrel, Kenyans can expect to see an influx of investors scouring every corner of the country for oil.

A lot of exploratory work is, in fact, already taking place in the coastal areas where indications are that gas finds is a strong likelihood.

In the medium to long term we are looking at increased wealth and foreign exchange for Kenya.

However, we need to challenge ourselves to continue focusing on growing GDP in all sectors as detailed in the Vision 2030 plan which did not factor in oil discovery.

Oil should not over-excite us to the extent of diverting out attention from balanced economic development.
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