• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 52 mins Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 7 hours Tesla Launches Faster Third Generation Supercharger
  • 56 mins EU has already lost the Trump vs. EU Trade War
  • 8 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 53 mins ''Err ... but Trump ...?'' #Humph
  • 10 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 2 hours China's Renewables Boom Hits the Wall
  • 22 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 17 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 23 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 22 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 22 hours Trump Interview On Farage's Radio Show #classy
Alt Text

Endless Economic Wars: A Major Threat For U.S. Oil Exports

The recently imposed Chinese tariffs…

Alt Text

Iran's Impossible Task: $194 Oil

As the global economy continues…

Alt Text

The Oil Mystery Undermining An Aramco IPO

Saudi Arabia’s oil giant Aramco…

Jen Alic

Jen Alic

 

More Info

Premium Content

Kenya Strikes Oil: New Regional Potential and Security Concerns

Kenya has announced its first oil discovery and is already discussing plans for the drilling of four exploratory wells this year in a development that portends a new future for Kenya as East Africa’s oil hub. It also comes amid, and could ignite, new security concerns. 

On 26 March, Kenyan officials announced a discovery of 20 meters of oil in the Ngamia-1 well in the country’s northwestern Turkana region after drilling to only one-third of the well’s depth. Kenyan President Mwai Kibaki described the discovery as a “major breakthrough” and “the beginning of a long road to make our country an oil producer”, with other officials predicting that it could take up to five years to determine the feasibility of production at Turkana.

On 27 March, the government announced its plans for four exploratory wells with drilling to be undertaken by Tullow Oil Plc (TLW), Apache Corp. (APA) and Anadarko Petroleum Corp. (APC).

“Twenty-meters of net oil pay is a reasonable result, it's certainly something that people in Kenya should be excited by. But the well has a lot further to go as well and there may be more oil there, there may not be, so this is essentially a sort of interim result of something that's exciting, but again, I would stress once more that there's much more work to be done,” Voice of America quoted TLW spokesman George Cazenove as saying.

According to TLW, the oil found in Turkana is similar to the light waxy crude in Uganda.

What this means for Kenya

If further exploration shows commercially viable oil reserves, one of the first benefits will be Kenyan infrastructure, particularly the port of Lamu.

Construction has already begun on the $23 billion Lamu Port South Sudan Ethiopia Transport Corridor (Lapsset), which includes a port and oil refinery in Lamu, in southeastern Kenya, dangerously close to the border with Somalia. The project also includes an oil pipeline, railway and highway linking Lamu to South Sudan and Ethiopia. Newly independent South Sudan is anxious for the project to be completed, as it plans to use Lamu as its main outlet for oil exports. The entire project is slated for completion somewhere around 2015.

The Lamu port project rounds off Kenya’s infrastructure. Its other port of Mombassa on the Indian Ocean will be small in comparison in terms of berth and it has been unable to cope with the demands of landlocked neighboring countries.

On a regional level, the benefits to Kenya could be immense and it will become increasingly more attractive to its landlocked neighbors. Kenya is home to the best potential energy infrastructure, with a seaport at Mombassa, a refinery and the comprehensive Lamu project underway. Kenya is a hub of sorts for East African finance and transport, and it could take advantage of its oil discovery to pursue this status more energetically. It may even be able to lure international oil companies operating in other East African nations to its territory to set up their headquarters, attracted by fewer security threats and better infrastructure. The end result could see a shift from Uganda to Kenya as the “capital” of East Africa’s oil industry.

The Kenyan oil discovery is a development that the East African Community (EAC) should be considering very closely.

Security Challenges

Though Kenya enjoys a higher level of security than its neighbors, its first oil discovery comes amid a growing threat from Somali al-Shabaab militants, who earlier this month are suspected by authorities of having been responsible for a grenade attack on a bus terminal in the Kenyan capital, Nairobi, killing six people and wounding more than 60 others. Western officials in January had warned their citizens about traveling to Nairobi, fearing an imminent attack.

However, Al-Shabaab denies involvement in the attack, and this is a significant development that portends a new security paradigm for Kenya. Had it been behind the attack, Al-Shabaab would have claimed responsibility, the point being to send a clear message to Kenya about its interference in Somalia. The denial of responsibility suggests the possibility that a Kenyan Islamist group, possibly seeking to emulate al-Shabaab, has forged stronger roots.

Kenya is targeted by al-Shabaab due to its deployment of troops to Somali in October 2011, where thousands of Kenyan soldiers are fighting militants in the south. Only two weeks after that October deployment, al-Shabaab struck back with two grenade attacks in Nairobi, one in a bar and one at a bus stop. Al-Shabaab is also believed to have undertaken a number of kidnappings on Kenyan territory recently. 

But Kenya is not backing down over Somalia. On 25 March, the Kenyan Defense Forces (KDF) launched air strikes destroying three al-Shabaab bases and reportedly killing 13 al-Shabaab fighters.

Another security concern will be Turkana itself, the location of Kenya’s first oil discovery.

Turkana is home to marginalized people and suffers from severe underdevelopment, coupled with a high level of corruption, which translates into insecurity.

On 25 March, eight people were killed in clashes between police and rival animal rustlers in Turkana County. Officials said the clashes were the result of disputes between two communities over pasture, water and territorial boundaries. But the situation is indicative of a greater problem, and adding oil to this equation is likely to intensify inter-ethnic, community rivalry in this area.

By Jen Alic of Oilprice.com

Jen Alic is a geopolitical analyst, co-founder of ISA Intel in Sarajevo and Tel Aviv, and the former editor-in-chief of ISN Security Watch in Zurich.




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • daniel on April 01 2012 said:
    I think it is somewhat of a glaring omission that you don't mention the recent set back that Al-shabab has suffered in the hands of AU and Somali backed regional forces including Kenya. Al-Shabab is retreating and is in the brink of its demise with a lot concerted effort coordinated with regional forces and with the backing of the somali people as well as the international community. This challanges the assumption that your article makes which is that as things stand, Al Shabab is a force to reckon with and a serious concern for regional growth in light of oil discovery and developement of a port. I wonder if the reason for that is lazy journalism or resistance to appreciate complexities when its easier to fit new facts to an established African narative--namely that Africans can never exploit their resources properly.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play