- Kenya Joins League of Oil Exporting Countries as Controversy Brews Over Revenue Sharing
Kenya has joined the league of oil-exporting countries after it exported its first crude oil to Malaysia on Monday in a ceremony flagged off by Kenyan President, Uhuru Kenyatta.
The crude oil, 200,000 barrels, was bought by a Chinese Company –Chemchina UK Ltd — and was sold for Sh1.2 billion.
The President, during the flagging off of the country’s maiden oil exportation, said, “The first export of crude oil by our nation, therefore marks a special moment in our history as a people and as a country
“There are special moments that mark a turning point in the destiny of our nation,” he said.
Following the sale, local leaders have called for equitable distribution of revenue to ensure that all citizens benefit from the sale.
Earlier in March, President Kenyatta signed into law, a bill which regulates oil exploration and production. It also provides guidelines on how revenues generated from the sale of crude oil, should be shared amongst the government, local communities and companies.
The law allocates 75 per cent to the central government, 20 per cent to local government and 5 per cent to local communities where the oil was discovered. The 5 per cent was a reduction from the initial 10 per cent allocated to local communities.
The law, however, requires that the percentages be reviewed after a 10-year period.
The law was originally established for production on a large scale but was stalled by a feud amongst tiers of government and impoverished Turkana indigenes in the northern region; on whose soil the oil was discovered.
The revenue distribution has popularly being referred to as ‘the sharing of a goat’ by the President himself, some governors and an oil executive.
Turkana County Deputy Governor, Peter Emuria Lotethiro who believes the ‘leg of the goat’ should be given to Turkana said; “When you slaughter a goat, the owner of the goat is left with the leg; Turkana wants the leg.”
London based Tullow Oil, also indicated its interest in a piece of ‘the goat’.
Its Chief Executive, Paul McDade, said: “Having spent $2 billion, the joint venture partners will be able to get a bit of that goat. There is much more investment to come which will create jobs across Kenya”
The company also revealed that the Turkana field produces about 560 million barrels of oil and that by 2022; the field should produce an estimated 100,000 barrels per day.
Tullow and Partner African Oil were the first explorers to discover commercial oil reserves in Turkana’s Lokichar basin in 2012.
