This archive report was first published on 30 October 2019.
Kenya is set to market its crude oil deposits to global financiers, marking a significant shift in the country's approach to financing large-scale projects. According to Shell Kenya Country Manager Brian Muriuki, the project is expected to be financed through a combination of debt and equity, with 70% of the costs covered by international debt markets and 30% through equity financing.
The project, which includes a heated pipeline between Lokichar and Lamu, has been in the works for several years. Crude oil reserves were discovered in 2012, and it is estimated that over 200 billion shillings has been invested in the project so far.
Tullow Oil owns a 50% stake in the project, while its partners, Canada's Africa Oil Corp and Total, each hold 25%. The revenue sharing agreement between Kenya and the oil companies has not been disclosed publicly, with Muriuki stating that it is still a process that is yet to be finalized.
Kenya signed the heads of terms agreement with Tullow, Total and Africa Oil in June, specifying the obligations of each party and investments required for commercial production. The laying of the heated pipeline and oil facilities is estimated to take about 36 months, with experts projecting that Kenya will likely start commercial crude oil production in 2023.
As the project moves forward, Turkana community leaders have been pushing for a percentage of the oil revenues, plus a monthly stipend for each family affected by oil operations.
