Yesterday, State House Kenya sent out a statement about plans for a new Kenya oil pipeline from Lokichar in Turkana to Lamu at the Kenya Coast which Total had now committed to build.
It was great meeting Momar Nguer, a member of @Total Executive Committee and its President for Marketing & Services. Momar, confirmed commitment to the Lokichar – Lamu Oil pipeline. Kenya in turn will support Mogas Kenya – @MogusGroup & Total SA, as we deliver shared prosperity. pic.twitter.com/bsEXVsL70Q
The statement comes at a time when Uganda which is believed to have larger oil fields that Kenya has committed to build an oil pipeline through Tanzania, rather than through Kenya. Also for Kenya which had planned to start oil shipments last year in a pilot project using trucks from Turkana to Mombasa, with Tullow, had that plan temporarily stall over infrastructure and political issues.
Blocks sweeten oil pipeline deal.
The Total offer will be sweetened by the provision of some oil blocks in Kenya. Total is in the processor completing an acquisition of Maersk Oil for $7.45 billion and doing the pipeline for Kenya is one way to get local approval for the deal from thelocalcompetition authority.
Following Total SA’s commitment, the Government has consented to a proposed acquisition of the issued and to-be-issued share capital of Maersk Oil Exploration International (Mogas Kenya) in respect of Blocks 10BA, 10BB and 13T. – State House Kenya statement.
Total Kenya is listed on the Nairobi Securities Exchange and Total has been in Kenyan for over sixty years; the company’s operations include eight depots (five of which are solely owned), 2 LPG filling plants and 180 service stations.
The news comes after other oil developments including Total buying out a majority of Tullow’s oil developments in Uganda, leaving Tullow to concentrate on the oil pipeline through Tanzania.
Also see part I of Oil Pipeline, Economics & Politics.
Excerpts from the Memoirs of a Kenyan Spymaster, a unique autobiography by Bart Joseph Kibati who worked in national intelligence for over two decades, where his job was to, with others in the business, identify and analyze threats and advise the government. It is a revealing look at many sectors of his life (he got married the same day that Tom Mboya was shot), Kenya’s transformation in the independence era, the business environment, and the state of security in East Africa and international relations, while serving in two administrations during which he interacted with Presidents’ Kenyatta and Moi.
Police & Cattle & Remote areas
Cattle rustling by cattle raiders – Ngorokos (former soldier) has long been a feature in Kenya, with Laikipia and Samburu raids spilling over to Turkana, Baringo and Isiolo areas. Suguta Valley where over 40 police were killed in 2012 is a place that police have long avoided going to for years because of the dangers.
While the ‘Ngoroko’ plot against Moi, was a myth, it was based a well-intended idea to have an elite fighting unit to chase and deal with bandits.
For decades, Lamu’s Boni forest, which is near the Somalia border, has been a hideout for poachers & bandits and this has been sustained by poor policing practices in the area and support by local tribes.
East Africa & Leadership Styles
Some keen observations on some of the factors such as economic desires, ideology & actions of leaders – Kenyatta, Nyerere and Obote/Amin and other political party & government officials in the run-up to why the East Africa community collapsed.
Two days after the signing of an East African a treaty in 1963, there were coup attempts in all three EAC countries.
To make their decisions, Kenyatta relied on finished intelligence information, while Moi wanted raw information.
Moi wanted to know why the Kikuyu hated him and Bart told him about quotas in education and government, and the collapse of their banks (which were rolled into Consolidated Bank) and area infrastructure, to which Moi replied: “How can the government build infrastructure if they ask donors not to release funds?”
Industry & Economy
Beach plots allocated by the President and partnership with hoteliers resulted in massive hotel empires at the coast or wealth from selling utility plots – by people around the president.
The greed of property developers and corruption of environmental regulators.
The government moved to grant duty-free cars to university lecturers in a move to pacify their radical ways.
Coffee smuggling from Uganda, through Chepkube, opened the eyes of many people in government, including police, to quick great wealth that could come from corruption.
The Numerical Machine Corporation was a success. It just could not shed the ‘Nyayo car’ tag.
Human Resources & Working in the Government:
When he finished form four at Mangu High School, he had job offers to work at East African Airways, Barclays Bank, the Post Office, Kenyatta University, and also the option to continue his schooling at A levels!
The recent repeal of indemnity for security forces (and TJRC) makes it hard to do police work such as combating terror threats and is a demonization of patriots.
How colleagues, and politicians scheme to transfer, promote or demote other security staff.
There is no pension for older Kenyans who, while experienced, are discarded under the guise that they are preventing youth from getting jobs. It seems the Government hopes they will die soon and stop draining the meagre government pension.
There were no successful coups in Kenya due to (long-term spymaster chief) Kanyotu and the Special Branch. The 1982 coup was unnecessary; It could have been stopped but for a leak and bureaucracy. But Kanyotu was later misled by Pattni into the Goldenberg scam.
The more open that national intelligence services become, with things like having a visible head (of tee NIS) and a website, the less effective they have become.
Finally, he ends by asking if Kenya is facing more terror attacks, urban crimes, and rural banditry today because the country doesn’t have a functional intelligence collecting unit. Or there’s more reliance on technical intelligence than human intelligence by a demoralized, ethnicized spy unit.
Some revelations in Spymaster are shocking, but many of the stories have been cited elsewhere with different interpretations, and many of the people named have passed on, or circumstances have changed. Also another story elsewhere, quotes Lee Njiru a long time civil servant who says that: (the) Official Secrets Act binds civil servants to keep secrets for 30 years and the period had elapsed and he was now free to share what he knows.
Also read The Birth of an Airline by Owaahh, which narrates from the Spymaster book, about the break-up of East African Airways and the birth of Kenya Airways.
A few weeks ago Tullow Oil gave an update of their half year results with operational updates for different countries including Kenya and Uganda.
Uganda: Tullow sold a stake in its Uganda oil development to Total Oil for $900 million ($200m cash – $100m on completion, $50m at FID, $50m at first oil, $700m in deferred consideration), and will retain 10% of that and also of a $3.5 billion pipeline through Tanzania. The statement mentions inter-governmental agreements signed to secure pipeline routing and commence key commercial agreements, and last week, Tanzania and Uganda announced the commencement of the construction of a $3.55 billion, 1,445 kilometer-long oil pipeline that will be completed in three years.
Ghana has sustained low-cost production due to an absence of drilling in 2017.
Kenya: The Implementation experience of the early Tullow early oil pilot scheme will assist the Tullow oil joint venture, Kenya Government and Turkana county to prepare for full field development (however a previous plan to transport oil by truck had been shelved before the elections amid a dispute of sharing oil revenue).
Tullow Oil has an advert in the newspapers today seeking suppliers to help it transport oil from Lokichar, Turkana to Mombasa. There are two requests:
For registered truck companies in Kenya, that have new vehicles, and experience transporting hazardous material.
The other is for a lease of 100 pressurized insulated containers of 25,000 liters each. (Presumably these T11 standard containers can also be transported by railway).
There is a bit of regional and domestic politics here. While Uganda seems to have opted to refine its oil and ship it out via a pipeline in Tanzania, Kenya wants to show that it can deliver on that in the short-term.
Trucks on a highway (via AfricaKnows.com)
Also the Jubilee government is checking off all its pre-election promises and while the one to prioritise the construction of an oil pipeline from South Sudan and a new oil refinery at the coast may not materialize, expect by the August 2017 elections to have a barrel of Kenyan oil shipped out from Mombasa, regardless of the means of transport or the cost of production.
Once oil is trucked to the coast, the long-term picture could see a lowering of the costs and perhaps re-engagement by other countries in the region on the suitability of shipping oil through a pipeline in Kenya.
Tullow Oil have just released their Kenya Report on their oil exploration efforts and local impact in the last year with special emphasis on the Turkana area. And earlier, Base Resources who are a signatory to the Extractive Industries Transparency Initiative had also released their EITI impact report.
In the last year, by their measure, Tullow Oil and Base Resources have paid the Kenya government $22 million and $16 million respectively in direct payments, and with more indirect benefits. Oil and mining are industries that are complex and expensive to set up, but which don’t generate a lot of direct jobs – some of their numbers include:
Last year, Tullow paid Kshs 4.1 billion (~$48 million) to Kenyan suppliers, $100 million to foreign suppliers registered in Kenya and another $100 million to international companies. Of the Kenya supplier amounts, Kshs 259 million went to Turkana business interests.
They still need Kenya petrol legislation.
Estimated findings are 600 million barrels in South Lokichar alone.
Infrastructure Needs: Looking at an export pipeline and regional road and rail. Regional countries need to support an export pipeline, agree on what route will such a pipeline take, where the terminal will be (likely to be Lamu) – and who will invest/pay for this. The proposed underground pipeline will need to be a heated one, and at 850 kilometres will be the longest heated pipeline in the world.
Social Impact: Tullow have community resource offices in Lodwar, Lokori, and Lokichar – and this year, plan to double the Kshs 233 million ($2.75M) they spent on social projects in 2013, during which they faced community concerns and protests of local impact which even temporarily shut operations. They have provided 3,000 bursaries and scholarships and teaching materials for 50 schools.
Jobs Jobs Jobs: Tullow has 100 employees on site, 70% of who are Kenyan. Another 2,000 are employed by their subcontractors/suppliers and 87% of these are staffed by are locals, and 59% by Turkana people.