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Economy

US eyes Kenya crude pipeline amid China dominance

US Ambassador to Kenya Robert Godec when he paid a courtesy visit to Cabinet secretary for Energy and Petroleum Charles Keter at his Nyayo House office on January 5, 2015. PHOTO | DIANA NGILA
US Ambassador to Kenya Robert Godec when he paid a courtesy visit to Cabinet secretary for Energy and Petroleum Charles Keter at his Nyayo House office on January 5, 2015. PHOTO | DIANA NGILA 

The US has shown interest in Kenya’s planned crude oil pipeline as it seeks a piece of the East African country’s mega infrastructure deals dominated by Chinese contractors.

The pipeline linking Kenya and Uganda’s newly found oil fields to the Coast was one of the issues discussed between US ambassador Robert Godec and new Energy secretary Charles Keter on Tuesday.

The US has recently preferred to sell high-tech goods like plane engines, hospital kits and power plant implements, leaving the Chinese to fund infrastructure projects like construction of railways, ports and roads.

Enquiries on the pipeline deal comes amid warmer relations between Kenya and the US, culminating in President Barack Obama’s visit to Kenya in July last year – the first by a sitting US President.

“We also discussed the question of an oil pipeline in the northern part of Kenya to help extract Kenya’s oil,” Mr Godec told the Press after meeting top Energy ministry officials, including principal secretary Joseph Njoroge.

Kenya and Uganda reached a deal in August on the route for a crude pipeline linking their newly found oilfields to the Kenyan coast.

Oil executives have previously said they cannot make progress with their final investment decision on developing discoveries in Uganda and Kenya until the pipeline route and related costs were clear.

Uganda has an estimated 6.5 billion barrels of crude reserves in its fields in the country’s west while Kenya reckons it has commercially viable deposits.

Mr Njoroge said in June that once a decision on the route was made, the pipeline’s construction could be completed by 2018 or 2019, in time for the first oil export in 2022.

Development of the pipeline was thrown into confusion after Ugandan investors expressed security concerns over the northern Kenya route. A route linking Uganda oil fields to Tanzania is touted as an alternative.

“We have talked, you have heard about the pipeline. We need to fast-track that,” Mr Keter said.

Mr Godec and Mr Keter did not give details on the talks around the crude pipeline.

A pipeline deal will underline the ongoing shift in Nairobi-Washington relations, especially on infrastructure.

President Uhuru Kenyatta’s policy of economic diplomacy in the initial years of his presidency mirrored that of his predecessor Mwai Kibaki of looking East.

The bulk of Mr Kenyatta’s diplomatic engagements have been in Middle East and Asian countries as well as strengthening Kenya’s economic ties with African states.

This has won Chinese contractors mega deals including building the Sh445 billion Mombasa-Nairobi railway and expansion of the Jomo Kenyatta International Airport and the Outer Ring Road.

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