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China wastes no time in buying off Kenya’s first batch of light and sweet crude oil

President Uhuru Kenyatta shakes hands with Chinese Ambassador to Kenya Wu Peng. (Embassy of China in Kenya)
  • On Thursday, Petroleum principal secretary Andrew Kamau revealed that a Chinese firm had bagged the deal 
  • ChemChina Petrochemical, is Chinese State-owned petroleum multinational that is engaged in crude oil trading, storage and procurement.
  • The firm was selected on the basis of its offered price and according to standard international terms.

Barely two weeks after President Uhuru Kenyatta announced the first sale of Kenya’s crude oil at Sh1.2 billion ($12 million), it has now emerged whom is buyer.

Despite the government and British firm Tullow Oil Plc keeping a tight lip the cat is now out of the bag.

On Thursday, Petroleum principal secretary Andrew Kamau revealed that a Chinese firm had bagged the deal to lift the Turkana oil, in what marks Kenya’s entry into the league of oil exporting countries.

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“Kenyan government and Tullow Oil Plc together with its Joint Venture Partners in Kenya (Total and Africa Oil Corp) are pleased to announce that ChemChina UK Ltd has been selected as the buyer for Kenya’s first crude oil export. The firm was selected on the basis of its offered price and according to standard international terms,” Mr Kamau wrote in a response to enquiries on where the crude from Mombasa would be shipped.

ChemChina Petrochemical, is Chinese State-owned petroleum multinational that is engaged in crude oil trading, storage and procurement.

The maiden shipment of 200,000 barrels of crude from Mombasa is scheduled for next month.

Why it matters to you

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If you are interested to know just how many Kenyans will benefit from the sale, the latest revelation still leaves many questions answered since there is still no public production sharing contract to tell how much of the Sh1.2 billion will be shared between the Kenyan government and the Joint Venture Partners.

The Petroleum Act, 2019, provides for profit sharing between the National Government (75 percent), County Government (20 percent) and the local community (five percent) but the amount to be shared will only be known after the cumulative cost of the Early Oil Pilot Scheme is known and a formula agreed on how the cost will be recovered.

Kenya’s crude oil is classified as ‘light and sweet’ meaning it has less sulphur (below 0.5 per cent) – an impurity that has to be removed before crude is refined into petroleum.

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