Last Updated 13 years ago by Kenya Engineer
Kenya is set to be the first oil exporter in East Africa, starting shipments in 2016 following the discovery of oil last year by Tullow Oil Plc, a U.K company.
The London based explorer plans to start pumping in Kenya as soon as next year, Chief Operating Officer(CEO),Paul McDade said in an interview with Bloomberg. Kenya’s deposits may top 10 billion barrels, according to the company; more than three times the U.K.’s remaining reserves.
The exports are set to strengthen the Kenyan shilling currency. According to Phumulele Mbiyo, the regional head of macroeconomic research at Nairobi of CfC Stanbic Bank Limited, Oil will allow Kenya to diversify export earnings and act as a catalyst for infrastructural spending, especially on the transport network.
“The shilling is expected to benefit from inflows of foreign exchange and reduced spending on fuel imports,” said Mr. Mbiyo.
Kenya imports all its fuel, almost 80,000 barrels of oil a day at a daily cost of more than $8 million, according to U.S. government data. It relies on exports such as coffee and tea to support the balance of trade in a $37 billion economy, marked as East Africa’s largest.
This comes two months after the East African Community (EAC) tri-lateral Symposium was held in Uganda putting to task Kenya to spearhead oil pipeline development. Given Tullow Oil discovered oil in Uganda earlier than in Kenya, it was expected that Uganda would take the lead in exports.
“They are not drilling enough wells,” Kenyan Petroleum Commissioner Martin Heya said in a phone interview with Bloomberg. “Uganda drilled a long time ago, but it’s possible that we can produce earlier than anybody else. We shall be happy.”
Kenya’s economy will flourish according to Africa Oil CEO, Keith Hill.
“For the Kenyan economy, it’s going to be a major step forward. Once the export pipeline is completed they will have a significant influx of capital coming in from oil export revenues,” said Mr. Hill.
Source: Bloomberg
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