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Economy

Tullow regains sites after seizure by locals

A worker at the Ngamia 3 oil exploration site, run by Tullow, in Nakukulas village, Turkana. PHOTO | FILE
A worker at the Ngamia 3 oil exploration site, run by Tullow, in Nakukulas village, Turkana. PHOTO | FILE  

Tullow Oil has ended the standoff with local communities in Turkana that saw the seizure of the British explorer’s assets including wells.

The locals forcibly took over its site in early June following demands for more jobs and other benefits, highlighting the challenge of managing local expectations of swift returns as Kenya builds an oil and gas industry from scratch.

Tullow oil confirmed that none of its property had been damaged in the standoff.

“The labour dispute has been resolved with the Nakukulas community and we have access to the sites. No Tullow assets were vandalised. The sites are inactive so no interference,” the explorer wrote in an email response.

Tullow had written to Turkana County Commissioner on June 28 after its staff were denied access to three of its sites including one with 40,000 barrels of oil stored in tanks for early exports.

The takeover happened on June 10 with police at the local Lokwamosing station doing little to ease the standoff.

The siege saw blockade of Nakukulas Community Resource Centre, a facility built by Tullow as a point for stakeholder engagement.

Tullow was also blocked from accessing Ngamia 3 and Ngamia 8 sites-- which have active drilled oil wells, assorted water pumping equipment and a deep water reservoir.

“Kindly acknowledge that the company cannot bear liability for any loss, accident, incident or environmental deterioration on account of its lack of access and control of the sites,” Tullow told the County Commissioner in June 28 letter.

Last week, the company said its exploration and appraisal campaign in Kenya had progressed to schedule in 2017 with two new discoveries made.

Kenya in June 29 said it was delaying plans to start crude oil production and exports until the government passes an amended law that includes setting out how revenues will be shared between national and county governments and local communities.

The law is expected to be in place by late September, when a new Senate and National Assembly convene after August 8 elections.

Kenya announced plans last year to start small-scale production in June 2017, involving trucking about 2,000 barrels a day to the Coast. The government said this was not expected to generate any profit.

Kenya has an estimated 750 million barrels of recoverable reserves in onshore fields, but no pipeline to take the waxy crude from the northwest to an export terminal on the East coast.

“We are ready to resume Early oil Pilot scheme trucking whenever the government gives us the go ahead to do so,” Tullow said.

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