Kenya this week started oil exports, flagging off the first consignment of 200,000 barrels of crude oil valued at $12 million, to Chinese company ChemChina. The export marked another development in Kenya’s controversy-ridden quest to benefit from the resource discovered in 2012.
The country’s government said ChemChina won the bid after offering the best price of $60 per barrel, but Kenyan nationals accuse President Uhuru Kenyata of refusing to disclose details of the sale, including the other seven bidders and what they quoted.
East African reported yesterday that Kenya shipped 200,000 barrels yet the initial plan was to export 400,000 barrels in the maiden shipment, raising questions about the government’s haste in sending the crude to the international markets.
President Uhuru Kenyatta, however, failed to provide the assurances on how the government intends to share out the revenues to be accrued under the early oil pilot scheme and even when Kenya commences commercial production in 2024.
“We will ensure that Kenya’s natural resources are utilised in a manner that yields maximum dividends today, but without compromising the interest of future generations,” said the President. Analysts contend that one of the inescapable challenges in modern governance of the extractives sector is expectations management.
There are expectations crude oil export revenue will deliver substantial social, economic and infrastructural improvements. “These expectations, whether realistic or not, need to be managed in order to avoid any negative consequences,” said Thuo Njoroge, an adviser at The Africa Utility Forum.
Although Kenya settled the issue on revenue sharing with the enactment of the Petroleum Act, 2019, the failure by the government to reveal details of contracts signed with companies involved in the project has raised suspicion.
The Petroleum Act provides the national government is entitled to 75 per cent of the oil revenue, county government 20 per cent and the local community five per cent. Notably, the law only recognises Turkana County where the crude was discovered, meaning the rest of the country will be hoping to benefit from the 75 per cent allocated to the national government.
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