Kenya makes a triumphant entry into OPEC club with first sale of crude oil worth $12 million

Trucks of the first crude oil consignment from Lokichar,Turkana arrives at the Mombasa's Changamwe KPRL storage facility on Thursday 7th June, 2018. (The Standard)
  • On Thursday, President Uhuru Kenyatta announced amid cheers that the country has exported its first crude oil worth billions of shillings
  • 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.
  • This is Kenya’s first sale of crude oil from Turkana County and though considered a small scale compared to other exporters, it paves the way for establishment of the first croup of local oil barons.

Kenya has officially joined the exclusive club of oil exporters countries after making the first sale of crude oil sourced from Turkana County.

On Thursday, President Uhuru Kenyatta announced amid cheers that the country has exported its first crude oil worth billions of shillings

“We are now an oil exporter. Our first deal was concluded this afternoon with 200,000 barrels at a price of 12 million dollars,” said President Kenyatta.

The crude oil was valued based on the international crude oil prices of about 6,500 shillings per barrel at 1.3 billion shillings

Tullow Company, which is in charge, used to move an estimated 600 barrels of the crude oil in a day but now moves 2000 since May. The consignment has been delivered by trucks from Turkana to Mombasa since July last year under the early oil project scheme.

Why it matters

This is Kenya’s first sale of crude oil from Turkana County and though considered a small scale compared to other exporters, it paves the way for establishment of the first croup of local oil barons.

In 2017, the national government through the state-owned National Oil Corporation (NOCK) announced that Kenyans could buy a stake of Turkana oil through an initial public offering (IPO) worth Sh103bn ($1billion) before the country start exporting the precious commodity.

It is means that the livelihood of the people of Turkana, majority of whom wallow in poverty is set to improve for the better.

“So, I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we eliminate poverty,” said Kenyatta, Citizen Digital reports.

Kenya first discovered oil deposits in 2012 and since then, explorations have continued in the Lake Turkana Basin with more deposits being reported.

What this means for you

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.

This type of oil is known to fetch higher prices in the global market because dealers find it easier to refine and it produces high-value products such as petrol and diesel.

It is, however, waxy and sticky, making it necessary to heat it during transportation.

In 2018, Tullow Oil announced plans to drill 300 oil wells in Turkana County and invited bids.

Since Kenya first discovered oil deposits in 2012 foreign countries and international firms have been salivating over the ‘black gold’. Qatar is the latest entrant to join the race of firms eyeing a piece of Kenya’s 'light and sweet' crude oil.

Qatar Petroleum, a State-owned company of the energy-rich Arab nation, has acquired three offshore exploration blocks in the Lamu Basin, joining a growing list of global corporations seeking to exploit the huge fuel and gas deposits believed to be underneath the Indian Ocean seabed.

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