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Activists want details on Kenya oil contract with Chinese firm

The Celsius Riga tanker carrying Kenya-produced crude oil, sits docked during a ceremony at the Kipevu oil terminal at the port in Mombasa, Kenya, August 26, 2019

The Celsius Riga tanker carrying Kenya-produced crude oil, sits docked during a ceremony at the Kipevu oil terminal at the port in Mombasa, Kenya, August 26, 2019

Kenya has exported its first shipment of oil, worth about $12 million, under a deal with the Chinese petrochemical company, ChemChina. Members of a civil society group are demanding transparency, calling on the Kenyan government to show how the Chinese firm won the bid to buy the oil and how much revenue the country is getting from the sale.

After years of exploration, Kenya exported its first crude oil shipment last month. Amid the excitement of Kenya joining the list of oil-producing countries, some civil society groups are accusing the government of keeping oil deals with a Chinese company secret.

Charles Wanguhu is the coordinator of Kenya Civil Society Platform on Oil and Gas (KCSPOG) a lobby group that works around the issues of oil and gas. He says they want to know whether the country is getting the best deal for its resource.

“The challenge that is ongoing in the sector is a lack of proper disclosure," said Wanguhu.

"So the ministry indicated there was abiding process of the oil but we have not had access to any of the bidding documents, for example on which other companies bid for the oil and how much they bid for the oil so by the time they got ChemChina, which was the eventual buyer, we were asking for a more transparent process of these biddings that we could say the country got the best deal.”
Kenya’s principal secretary of petroleum, Andrew Kamau, says the information the government provided on who bought the oil and how much they paid was enough.
“It is not a fair comment," said Kamau.

"We told them who bought it, how much they bought for it and the volume. What more would you want? You know people have all sort of phobias so I can’t really speak to that.”
The ministry was also reluctant to share how much was spent in the oil exploration. China has helped Kenya to build roads and standard gauge railway line running into millions of dollars. Wanguhu says he fears for the future if China will be the primary oil buyer from Kenya.
“The challenge is that we have a significant amount of debt that has been accrued to China in the building of infrastructure around the SGR and so its significant when you see that if our oil is going to China then the risk falls that if we are unable to service our debts that we might get into an agreement that might not be suitable for the country," said Wanguhu .
Hellen Odegi, an oil and gas expert, says history does not favor Kenya when it comes to managing public resources.   
“The side I would be worried [about] is because of the history we have had in Kenya of misuse of resources, so that we don’t find ourselves facing another issue like what we have seen in the past two-three years, where massive amount of money being lost in counties and national government so that we don’t make money and it's going to the pocket of two companies only," said Odegi.
Kenya currently produces about 2,000 barrels of oil per day. Last month, oil explorer Tullow said that production could rise to 100,000 barrels per day by 2024.


+1 #1 WADADA roger 2019-09-19 09:07
I think it is the order of the day in Africa and mostly east Africa where sitting presidents always want to treat national resources as their own, they must have learned this from Uganda
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0 #2 Zaitun 2019-09-19 14:31
If Kenyan authorities in whom we had some trust begin copying our Ugandan NRM leadership, then forget everything: East Africans are long dead and finished.

What is this business where E. African leaders, topped by our Ugandan old man, think everything that smells money belongs to their respective families and friends?

When will the common men and women of East Africa enjoy descend life- better schools, hospitals, social infrastructure, better employment opportunities.... ?

I was tempted to believe that youthfull Kenyata would bring smiles to Kenyans, but if what is writen on board is true, East Africa will remain a dwarf region not withstanding all the lucrative talks!

Is the region bewitched or they have alreay sold everything to foreigners?
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0 #3 kabayekka 2019-09-19 17:50
What is wrong for this African country to refine its own crude oil and use the by-products at its own rate of consumption?

And if it has not the technology, well when does it hope to get it? When it has run out of this natural resource probably by 2060?
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+1 #4 Lysol 2019-09-19 22:49
Kenya had to beat Uganda by exported it's Turukana oil first after Uganda decided not to build it's oil pipeline through Kenya.

That was one of the reasons con-man M7 rushed to open the border between Karamoja and the Turuka last week with that gullible inebriated Kenyatta.. The backstabber M7 will destroy him. Good he is leaving soon.
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