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Wednesday, July 26, 2017

G-Spot: Timing is everything, or so they say

I’ve been around the block a few times and I can attest to the fact that there is a great deal of truth in the statement that “timing is everything”. I even came across song lyrics by a fellow called Garret Hedlund underlining the essence of timing: It can happen so fast/Or a little bit late/Timing is everything."

The question of timing came up for me as I considered the relatively recent oil finds in Kenya and how for years, Kenyans had prayed and wished for such a discovery. I remember hearing about people prospecting for oil in Kenya when I was still at school in the 1980s.

In fact, a little research shows that oil exploration in Kenya began as far back as 1954. According to Hansard from 1993, when former Changamwe MP the late Kennedy Kiliku asked for a progress report and how much money had been spent, the answer from the Energy minister was that from 1954 to 1983, 16 dry holes had been sunk in parts of the country.

Then from 1984 to 1993, a further 13 holes were sunk, but to no avail. Up to then, the biggest prospectors were US oil firms, who had altogether spent $137 million (Sh13.7 billion) in their quest to feed (mainly) what President George Bush would later refer to as America’s “addiction” to oil.

Of course, the Americans would have been thrilled to have discovered oil in Kenya, and I can bet that our country’s history would have been completely different and not necessarily in a good way, if that had happened. As things happened, it was a British firm, Tullow Oil, that first discovered oil in Kenya just a few years ago in 2012.

The discovery excited Kenyans, some more than others, and I get the horrible feeling that there are those who are writing cheques with the as-yet unearned fortunes from the oil that has not yet become a commercial reality. In fact, for me at least, this explains some of the crazy debt the country has been getting into.

As things go, the oil may not be the panacea that some believe it will be, and this is where the question of timing comes in.

Had they found the oil back in the 1950s or even in the 1990s, when Kiliku was talking about it in Parliament, the nation might have benefitted from it, and all things being equal, our economy would have been doing very well, thank you.

But timing is merely a function of finding the right balance between supply and demand, and now we are discovering commercially viable oil at a time when the rest of the world is beginning to talk about ending its dependence on fossil fuels, with the increasing production of electric cars, for instance.

Amid the growth of renewable energy use and the global fight to limit carbon emissions, it’s beginning to look as though the demand for oil will peak within the next decade or two. Will we be left holding the baby or will someone have figured out a commercial use for oil other than petroleum products?


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