The Mystery of the vanishing oil profits

13 Dec, 2019 1 comments
Wangari Muikia Wangari Muikia

Kenyans have been primed to believe that we will be the recipients of significant revenues coming from the discovery of oil. But things on the ground are quite different, especially with the following two key mysteries threatening to keep these revenues at bay.

First, how much will Kenya earn from oil profits as per the much fabled petroleum agreement? The petroleum agreement has not been shared, nor have key stakeholders in Turkana and around the country, seen the document. While the sharing is clear in the recently passed Petroleum Act (75% of oil profits goes to the country, 20% to Turkana County and 5% directly to affected communities), just what are we sharing? Are we talking about oil profits of 1 million dollars or 100 billion dollars? 

Second, is Tullow Oil Kenya – one of the main contractors extracting the oil – still a going concern? According to the Daily Nation in its article on 11th Dec 2019, Tullow Oil is cutting its field operations in order to strategize against poor performance in recent years. The Guardian newspaper on 9th December reported that company shares are at a 16 year low. The company had optimistic investments that are turning sour – like the low demand for gas extracted in Ghana and the undesirable quality of crude oil in Guyana. To contain the slump, Tullow has slashed its production forecast. This should raise an alarm because while Kenya’s oil fields are significant for Kenya, in global scheme, it is a small operation. For example, the Kenya oil project is primed to produce 80,000 barrels per day, but Nigeria produces 2 million barrels per day, and is not even in the top 10 oil producing countries in the world. So with trouble brewing for Tullow, will it fold? Will operations in countries such as ours be stalled? Can the consortium find a new partner at all and in time? 

The faster we resolve these two mysteries, the more stable and achievable Kenya’s oil revenue dreams can be.

Our team is keeping close tabs on these two issues. We are currently working with the county through Oxfam, to determine a suitable economic model to maximize the utility of the 25% revenues coming into the county. Not only will this model be useful for the oil revenues now, but for the other significant mineral resources in the county (including iron ore and gold).


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  1. Wayne Gichia

    This corroborates similar information I read elsewhere which is really sad. I remain hopeful that there’s good that’ll come out of this venture in the not too distant future. Thanks for sharing these insights