THE US EYES KENYA'S ENERGY DEAL WORTH $18BILLION

The United States is expecting to invest in the blossoming oil and gas sector in Kenya including an export pipeline which is expected to transport crude oil from the Lokichar basin to the Lamu port.

The United States through its ambassador Bob Godec met  the newly appointed energy and petroleum cabinet secretary Charles Keter  on 5^th January 2016 whereat the pipeline was the basis of the discussions.

“Commercially viable oil reserves were discovered in 2012 but to date nothing has happened which makes Kenyans wonder what happened. We are confident that the PowerAfrika initiative will help us realise our pledge to Kenyans,” Keter said.

The ambassador said the U.S was ready to secure 1.4 billion shillings ($104 million) for funding needed for the construction of the pipeline and power generation with its arm USAID stating it was ready to fund power generation from gas fired stations.

The energy cabinet secretary, Charles Keter stated that the extra funds would be sourced through the Export-Import Bank.

The development could be the peak of government efforts to attract US based investors in the oil and gas sector which saw  US President Obama meet Kenyan President Uhuru Kenyatta meet during his trip in  July 2015.

Discoveries to date made by Tullow Oil and its joint venture partners Africa Oil and Maersk Oil are at 600 million barrels of oil in Kenya’s Lokichar basin and plans are underway to fast track its transportation even through the road and rail networks given that the pipeline construction is expected to take longer. The pipeline deal is also yet to be clear as Uganda are considering an alternative route (Hoima - Tanga ) after expressing security concerns over the Northern Kenya route.

A number of U.S companies are currently involved in oil and gas exploration in Kenya . These include Erin Energy, ERHC and Anadarko. Another U.S based company, Marathon Oil announced the sale of its Kenyan assets although the new investor is yet to be announced.

The Houston based Erin Energy holds the largest exploration acreage by any IOC in Kenya. Erin was awarded 4 Production Sharing Contracts in the Lamu Basin of Kenya for a combined acreage of 36,913 km2. Block L1B is onshore, block L16 is along the coast and is partly onshore and partly offshore in shallow waters. Blocks L27 and L28 are located offshore in the deep waters of the Indian Ocean.

Source: Oil News Kenya