Lawmakers have reignited efforts to kickstart the country’s long-delayed oil export ambitions after years of stalled progress since the trail export in 2019.
Members of Parliament have set a June 2025 timeline for the Energy Ministry and British firm Tullow Oil to finalise plans for the Turkana oil fields. This push comes as the Energy and Petroleum Regulatory Authority (EPRA) announced a Ksh7.80 increase in petrol prices, a move that is likely to spark mixed reactions among consumers and industry players.
The National Assembly’s Liaison Committee, in its recent report, directed the Energy Ministry and EPRA to fast-track the approval of Tullow’s Field Development Plan (FDP) and secure a strategic investor for the Turkana oil project.
The committee stressed the need to commercialise Kenya’s crude oil reserves, discovered over a decade ago, to boost the economy and reduce reliance on fuel imports.
"That the Cabinet Secretary responsible for Energy and Petroleum, initiates amendments to section 4(2) of the Petroleum Development Levy Fund Act, CAP.426, to designate the Principal Secretary in charge of Petroleum as the fund administrator to improve transparency and accountability in the management of the fund by 30th June 2025,” the Energy Committiee said in its recommendations.
However, the road to oil exports remains fraught with challenges. Tullow, which discovered oil in Lokichar, Turkana County, in 2012, has struggled to attract investors and address financial gaps.
The exit of its two joint venture partners in 2023 further complicated the project. Tullow’s revised FDP, submitted in March 2024, was rejected by the government due to concerns over the company’s ability to fund the multibillion-shilling project.
The government granted Tullow a six-month extension, until December 2024, to address these gaps. Energy officials have raised doubts about Tullow’s financial and technical capacity, especially after the withdrawal of its partners.
Kenya’s oil export dream hinges on overcoming significant infrastructure and logistical hurdles. The Turkana oil fields are located approximately 800 kilometres from the port of Mombasa, necessitating the construction of a pipeline to transport the crude. The waxy nature of Turkana oil, which solidifies at temperatures below 40 degrees Celsius, adds another layer of complexity.
To address these challenges, Kenya has explored regional partnerships, including a proposed pipeline deal with South Sudan. Tullow’s CEO, Rahul Dhir, has suggested integrating Kenya’s oil exports with South Sudan’s output, which faces export challenges due to a malfunctioning pipeline. Combining the two countries’ oil production could justify the construction of a larger pipeline, providing a viable export route for both nations.
Despite these efforts, the project has faced delays and setbacks. The Lokichar-Lamu Crude Oil Pipeline, initially slated for completion by 2025, has been plagued by funding and logistical issues. Meanwhile, local communities in Turkana have raised concerns about the equitable distribution of benefits and the environmental impact of oil exploration.
Kenya’s first oil export in 2019, a pilot shipment of 200,000 barrels, marked a significant milestone. However, the project has yet to achieve full-scale commercial production. The government remains optimistic about the economic potential of oil exports, which could generate revenue, create jobs, and reduce the country’s trade deficit.
All this comes as EPRA on Wednesday announced plans to adjust margins for oil marketers, which will push petrol prices by Ksh7.80 per litre, with retailers’ margins increasing by Ksh4.59 and financing surcharges by Ksh0.69.
