This archive report was first published on 16 August 2019.
Published on August 16, 2019, Kenya has found a buyer for its first batch of crude oil in a deal that will see the commodity fetch a better return compared to the current market prices roiled by US-China trade tensions.
The Petroleum and Mining Ministry announced that Chinese firm ChemChina, through its London-headquartered trading arm, was selected from a list of eight firms that had bid to buy the country's 200,000 barrels of oil produced on a pilot basis.
The Government had announced on August 1 that the oil produced in Turkana and stacked at the Kenya Petroleum Refineries Ltd's (KPRL) storage facilities in Mombasa would be sold at Sh1.2 billion ($12 million), translating to an average of $60 per barrel (Sh6,180).
However, the international market prices saw Brent crude oil trading at $58 (Sh5,974) following a sustained decline, pressured by mounting recession concerns and a surprise boost in US crude inventories.
As a result, Kenya's oil would be going for a premium of over $1.60 (Sh164.8) per barrel.
ChemChina UK Ltd outbid seven other companies from Europe and Asia that had expressed interest in acquiring Kenya's oil, according to the ministry.
“ChemChina UK Ltd was selected following a competitive tender process through which an invitation to bid was issued to prospective buyers on 26th July 2019 and to which there was strong response with eight bids received from international firms representing European and Asian refineries,” said the ministry in a statement.
ChemChina operates in six different sectors, including oil processing, agrochemical production, and tire and rubber production, with nine refineries and a combined annual crude oil processing capacity of 25 million tonnes.
