Home Business Murungi calls for investment in oil production to tap Ksh 1T revenue

Murungi calls for investment in oil production to tap Ksh 1T revenue

Murungi says Kenya could earn at least Ksh 1.1 trillion from the Lokichar Basin alone

PHOTO | Tullow Oil

National Oil Corporation of Kenya Chairman Kiraitu Murungi is calling on the government to intensify investments in oil production in order to access potential revenue estimated a Ksh 1.1 trillion.

Murungi who served as energy minister when Kenya struck its first oil deposits in the Lokichar Basin in 2012 urged President William Ruto to increase investments into the production of the hydrocarbon which he says is the answer to the current debt crisis.

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According to Murungi, Kenya stands to earn at least Ksh 1.1 trillion($8 billion) from the Lokichar Basin alone, money he says is sufficient to cut borrowing and lift millions of Kenyans out of poverty.

“Experts tell us that the Lokichar field asset is quantified at 472 million barrels recoverable. With the State’s carried interest of 22.5pc share in the production sharing contract, the country stands to earn $8 billion at the current rate of $80 a barrel. We can do a lot with this kind of money,” said Murungi.

This comes as Tullow Oil announced last month that it would be assuming full control of Project Oil Kenya Development, following the exit of two joint venture partners, Africa Oil Corp and Total Energies in blocks 10BB,13T and 10BA in the South Lokichar Basin.

“Project Oil Kenya is a low-cost development project that has the potential to unlock material value. Prospective strategic partners remain engaged, and detailed farm-out discussions continue with a number of companies,” said Madhan Srinivasan, Tullow Kenya BV Managing Director.

Tullow Oil is currently waiting for the approval of the Field Development Plan (FDP) submitted to the Energy and Petroleum Regulatory Authority (EPRA), in March2023.

Kenya’s oil production has fallen behind schedule more than a decade after discovery, a factor blamed on lengthy approval processes and financing for the capital intensive project.

“Kenya’s upstream oil and gas sector has stagnated because of lack of passion, official neglect and lack of investment by the previous government. We cannot leave development and exploitation of the oil reserves in Lokichar to Tullow alone. As NOC we shall seek government support so that we can accelerate production and generate resources to pull our people out of debt and poverty,” he added.

Murungi was speaking in Nairobi when he mets delegates from nine countries attending the 8th African Petroleum Data Management forum in Mombasa County.

Countries participating in the conference are Norway, Somalia, Tanzania, Zanzibar, Uganda, Angola, Mozambique, Ghana and South Africa and Kenya.

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