Tullow Oil, the oil drilling company responsible for extracting oil from Turkana oil deposits, has claimed that the jubilee government pushed them into selling crude oil that was previously meant for analysis.
The Senate Energy Committee tasked the oil exploration firm to explain why it sold these batches of crude oil overseas in 2019 and 2022. Turkana county residents did not even benefit from the transaction revenue.
Further, officials from Tullow Oil stated that they were pushed by the government to sell the crude oil, contrary to the contractual agreement that indicated the early phase of oil exploration would be for analysis and extraction.
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At the same time, Tullow Oil stated that it cannot ascertain how much was collected from the sale of the two batches of crude oil.
A sitting by the Senate Energy Committee held on September 26th questioned Tullow oil operations and community engagement.
“They didn’t disclose the sale and the community was supposed to benefit,” Turkana Senator James Lomenen said.
The Energy committee chairperson, Nyeri Senator Wahome Wamatinga added: “We are investigating how the deal was done, how much was earned and whether Kenyan taxpayers benefited from the deal.”
Tullow Oil, based in the UK, is the company that is at the forefront of drilling oil in Turkana County.
This is after its joint venture partners Africa Oil Corp and Total Energies exited in May of 2023 for various internal strategic reasons.
Delays in the extraction of Turkana crude oil, a decade later
Oil was first discovered in Turkana County in 2012. The Turkana oil project has suffered several delays with the investors and government postponing timelines, making the future uncertain a decade since the oil was first discovered.
Upon inquiry into the matter last year, Tullow Oil said the future of the oil project is dependent on the company and its partners getting a strategic investor.
Among the challenges admitted by the firm, they admitted that Tullow Oil is facing credit challenges from lenders who are keen on investing in green renewable energy. This is with the wake of climate change and the shift towards green climate friendly energy as opposed to fossil fuels.
However, in December 2021, Kenya set a deadline for Tullow Oil to present a comprehensive investment plan for oil production in Turkana. They risked losing permission granted on two exploration fields if they did not meet the deadline.
Tullow Oil Kenya submitted its Development Plan to formally commence extraction of the crude oil to the Ministry of Energy in 2021.Two years later, there is still no response from the government after response from the oil firm.
Nyeri Senator Wahome Wamatinga questioned the delay.
“And we are going to ask EPRA and Energy CS what’s keeping the approval process long?” he posed.
Tullow oil progress
In March of this year, the UK-based company submitted an updated Field Development Plan (FDP) to the Energy and Petroleum Regulatory Authority (EPRA).
The FDP saw the increase of the crude oil facility in Turkana and the size of the pipelines transporting oil from Tukana to Lamu. This upscale in size saw the increase in projected costs for the project from Ksh 319 billion to Ksh317 billion.
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The FDP also increased the diameter of the Lokichar-Lamu pipeline from eighteen inches to twenty inches to allow a larger amount to pass through the oil pipeline.
According to Statista, Tullow oil revenue in 2022 stood at around 1.285 billion US dollars which is arise from 2021’s 1.273 billion US dollars.
