Water supply deal with Pokot boosts Turkana oil production

A potential breakthrough in negotiations with West Pokot County for supply of water to the Turkana oil wells has removed a major hurdle in the anticipated full-field development of the Lokichar basin.

Petroleum and Mining Secretary John Munyes Monday hinted at a deal with West Pokot Governor John Lonyangapuo to tap water from the county for use in the large-scale drilling for oil in Turkana.

“I want to thank Professor Lonyangapuo for the water from West Pokot, which will go a long way in providing a critical input as we go into full-field development. I promise that by 2020, the plans will be in place to enable construction of the pipeline from Lokichar to Lamu to transport the crude oil,” Mr Munyes said yesterday during the launch of the first Sh1.2 billion early oil shipment.

Water is needed in large quantities to force the underground oil upwards. A scarcity of the commodity, coupled with tussles over land ownership in the oil-rich Turkana County, have been the twin obstacles that have seen British exploration giant, Tullow Oil, postpone signing of the critical Final Investment Decision. It is only after signing of the FDI that more capital will be pumped into the project to scale it up to the commercial development stage.

While hinting at the water deal in yesterday’s launch of the crude shipment, Prof Lonyangapuo asked for a share of the oil proceeds for West Pokot residents.

“The people of West Pokot also provided security for the trucks which were ferrying the crude to Mombasa. We are waiting for the ribs of that goat. Let other people take the steak, the skin, the head and other parts but ensure we have the ribs,” the governor said yesterday.

The government is now expected to midwife the land ownership row which went to court earlier this year before it can tap the Sh150 billion-a-year revenue anticipated under the commercial crude oil production.

The use of water from Turkwel, which is just short of 100 kilometres from the Lokichar basin, has been on the cards for some time after it emerged that the underground water resources discovered in Turkana are located at a longer distance from the oilfields.

The Kenya Electricity Generating Company, which uses the Turkwel water to produce power, will also have to be involved to ensure electricity production is not compromised.

Turkana Deputy Governor Peter Lotethiro likened every truck ferrying crude to a goat which the Turkana community had been counting. He was making a metaphorical inference for his county to be given a share of the oil revenue. Kwale and Mombasa County governors also made similar requests in what reflects the heavy interests that is likely to play out when Kenya starts earning the petrodollars.

More such requests are expected in the piping of water for the distance from West Pokot to the oil fields since the area is known to have water scarcity that has led to frequent conflicts between the two neighbouring pastoralist communities.

The Petroleum Act 2019 provides for profit sharing between the National Government (75 percent), County Government (20 percent) and the local community (five percent), with the law only recognising the community in whose locality the oil will be sourced.

There are no revenues to the Exchequer expected from the maiden crude oil sale flagged off yesterday since the Sh1.2 billion will all be swallowed by expenses incurred by Tullow Oil in the exploration and trucking of the crude to Mombasa among other investments under the Early Oil Pilot Scheme.