Kenya plans pipeline to Arusha after oil discovery

The minister said South Sudan has an oil reserve of about seven billion barrels within its territory, boosting the viability of the joint pipeline project with Kenya.

“We have several concessions that have not been explored and we hope to see bigger output when they are explored,” he said.

South Sudan Finance minister Kosite Manibe said the huge reserves of proven deposits of oil reserves and inter-governmental agreements with Kenya would serve as a guarantee for financing the pipeline.

“The oil resources are real and more are being found…we believe the money will come,” Mr Manibe said.

Mr Murungi said Kenya and South Sudan are negotiating an inter-governmental agreement that would provide a legal framework for the joint pipeline project.

Landlocked South Sudan is looking for an alternative route through Kenya to export its oil following feuds with Sudan, from which it split in July 2011, over transit fees and revenue sharing.

South Sudan has shut down its oil production because of the disputes over pipeline fees with Sudan. South Sudan hopes to resume oil production in September.

aodhiambo@ke.nationmedia.com