Kenya and Uganda is planning to set up an oil company to be owned by all the stakeholders in a 400 billion shillings deal. The move is said to help the two countries move fast in decision making as well as agree on tariffs set for transporting oil per barrel.
The Kenya-Uganda committee on the crude oil pipeline will handle the framework of the oil company, shareholding, location, operations and the process of recruiting the management. Currently, Kenya and Uganda are awaiting settlement on a decision that will open up financing and oversee the construction of the pipeline. According to Tullow Oil, “The government of Kenya and Uganda are working together and the pipelines undertaken by a joint government-appointed independent technical consultant have progressed well.”
The developments come at time when more oil wells are set to be drilled in Turkana county as ERHC energy is targeting at least 65 million barrels to be drilled in the first well on Block11A.The US based company will start the drilling process by the end of the next quarter of next year. The American based company which holds 35 per cent interest in the block estimates that the block could contain about 645 million barrels of crude oil. The majority share of the oil well is owned by the National Oil Corporation. The company is supposed to drill at least one well of 3,000 metres and spend not less than 3.1 billion shillings. Block 11A is about 200 kilometres from the Lokichar basin where over 600 million barrels of crude oil have been discovered by Tullow Oil and its partner, Africa Oil Corporation of Canada.