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February 17, 2019

Let's get our policy on petroleum right


It’s no small milestone that the disputes surrounding the production of Kenya’s petroleum have been resolved. The investor, national government and local community have amicably agreed on their interests in the Turkana oil fields, setting the stage for the first test tanker to depart from Lokichar to Mombasa in the next 10 days.

It is a moment of celebration for the community, and the country no less, as we join the tiny league of oil producers. Negotiations over the exploitation of natural resources are normally protracted. In some instances, they end in stalemates, while intended beneficiaries wallow in poverty. And so it is laudable that we have avoided such a fate in our first attempt.

Expectations are indeed high that once full exports commence, revenues will radically jerk up our GDP and thence the transformation of the livelihoods of many Kenyans will begin. But caution is advised. As the analysis here shows, there are many unanswered questions over the oil exploration and exploitation, whose agreements are shrouded in secrecy.

Turkana is just the first find and many prospectors are still scouring for oil in numerous designated exploration blocks. They reveal varying deposits that could be commercially viable. Which begs two questions — do we have the policy and legal framework for the profitable exploitation of our natural resources, and should agreements be standard or specific to each case, such as Turkana?

Poll of the day