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The U.S. government says it will help Kenya get the financing it needs to build an $18 billion pipeline from the oil fields in the country’s northwest to its southeastern Indian Ocean coast to help it become a net exporter of oil.
The pipeline would stretch nearly 500 miles from Lokichar in Kenya’s Great Rift Valley to the coastal town of Lamu, and would be an almost impossibly expensive project for the East African nation. Yet there is enough oil there to make the plan worthwhile. The pan-African financial institution Ecobank Transnational Inc. says it has proven reserves of about 1 billion barrels of crude oil.
Yet the London-based energy company Tullow Oil Plc, which already has discovered 600 million barrels of crude in the South Lokichar Basin alone, has yet to begin drilling there because of the persistent low price of oil.
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In order to get the project moving, U.S. Ambassador Robert Godec met Tuesday with Kenya’s energy secretary, Alfred Keter, telling him that Washington would help Nairobi find the $18 billion it will need to build a pipeline that would move its oil to the coast and, from there, to foreign customers. The initiative is known as PowerAfrika.
“Kenya needs $18 billion worth of financing [for building the pipeline],” Godec said after the meeting, “so one of the questions we are discussing is how we can work together with the private sector and governments to raise that sum, to find ways to make certain that this financing become available.”
Keter said he hoped the U.S. commitment to financing the pipeline would end Tullow’s reluctance to begin drilling in an oil-rich area and help the Kenyan government keep its promise to modernize the country.
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“Commercially viable oil reserves were discovered in 2012 [in Kenya],” Keter said, “but to date nothing has happened, which makes Kenyans wonder what happened. We are confident that the PowerAfrika initiative will help us realize our pledge to Kenyans.”
Keter added that his country is eager to get begin producing oil. “I think that that we need to fast-track this project so that we join the many countries who are exporters of oil, and so that we can lower the cost of fuel in the country,” he said after the meeting with Godec.
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Godec agreed, saying the United States also hopes to help finance of Kenya’s capacity to establish a grid to generate and distribute electricity more quickly to meet the country’s growing demand. The two sides also are discussing how they can cooperate on extracting oil and transporting it to customers.
Although oil was found in Kenya in 2012, the country is in a race with Uganda, its neighbor to the west, which discovered oil in its territory nearly nine years ago. The two countries are vying to become the first in their region to become a net exporter of oil.
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By Andy Tully of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com
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http://www.nation.co.ke/business/US-denies-direct-support-for-Kenyas-oil-pipeline/-/996/3032384/-/k5aujmz/-/index.html
If the companies proceed with the investment, the American tax payer will not loss any money to the "third world" African country. However, Americans will gain through the private investment.
On the other hand, if Americans reject the project, the Chinese will be only too happy to grab the opportunity. The Chinese love such monumental projects, especially on the African continent. They are the primary reason why China has grown economically so spectacularly in recent times.
The question is whether or not Americans can compete the Chinese for the business opportunities that are currently on offer across Africa.
And the Beltway Pundits are "dumb-founded" as to why Trump is popular!
The Oil Sands is not "Dirty Oil". We have the most stringent environmental practices on earth. I guess we should start killing people and maybe have a civil war or two in order to get the North American O&G people working again... That way it's just blood oil and not dirty oil. LOL
One, will this actually help the average Tunisian?
Two, while I like helping people, I'm tired of American tax dollars going to supposedly help people, while really just increasing the global 1%'s pocketbook.......
Three and the most important, is this where we as Americans want our non-existant treasury spent? Would it not be better to create a loan w/ a legitimate, but low interest rate to provide solar?