Re-energise Kenya’s oil production goalThursday May 25 2023
The withdrawal of two major partners from the crude project in Turkana underscores the wavering confidence in Kenya’s ability to transform its oil reserves into a sustainable source of economic growth.
The departure of Africa Oil and TotalEnergies from the venture, coupled with Tullow Oil’s financial struggles, raises serious doubts about the environment created by the government to support the exploration and extraction since its discovery in 2012.
These partners have redirected their investments to regions they consider to hold greater petroleum and monetisation potential, leaving Kenya’s ambitions hanging.
The twin exits have left Tullow with full ownership of three blocks when concerns over its viability are mounting.
Furthermore, reports of two Indian firms retracting their plans to inject much-needed capital into the project further exacerbate these concerns.
President William Ruto is on record saying, “We need to make difficult decisions...” regarding fossil fuel. Indeed, there is a shift in recent years towards clean energy and the oil demand is expected to decline in the foreseeable future.
Analysts also cast doubts on better prospects for Kenya’s oil.
Tullow has blamed the government for dragging its feet, while the latter is suspicious of the development cost that Tullow provided.
The turn of events should jolt the government to action to assure investors.
Time is of the essence; otherwise, Kenya’s ambitions to join the ranks of oil-exporting nations will remain unrealised.