Kenya to start exporting oil by mid-2017

Kenya is poised to make its mark on the global oil market with plans to start exporting oil by mid-2017. The decision by the Organization of Petroleum Exporting Countries (OPEC) to cut oil output has led to a rise in global oil prices, which is encouraging for the region. In a recent interview, Mwendia Nyaga, the Chief Executive Officer at Oil and Energy, shared insights on the promising prospects for Kenya in the oil industry. Nyaga highlighted the positive impact of oil prices climbing above $50 a barrel, making it more economically viable for exploration and production in the region. He noted that Kenya has been classified as a low-cost source for crude oil, making it profitable even at $40 a barrel. One of the key challenges for Kenya as a newcomer in the oil production business is hedging against market fluctuations and uncertainties. With the recent shake-up in the industry that led to companies like TALO and Schlumberger making adjustments due to oversupply, Kenya is treading carefully to ensure stability and profitability. Nyaga also addressed concerns about Kenya mainly selling crude oil and the need for a refinery in East Africa. He mentioned the plans for two pipelines for exporting crude oil, with one pipeline running from Uganda through Tanzania to the Indian Ocean and another pipeline from northwestern Kenya to the port of Lamu. These developments are set to transform the oil export landscape in the region. As Kenya prepares to enter the global oil market, there are discussions about potential changes in retail pricing and inflation management. Nyaga emphasized that while international market prices will influence crude oil pricing, countries like Kenya will have the flexibility to determine local pricing levels. He highlighted the importance of maintaining revenue from petroleum products for critical infrastructure development. The interview also touched on the recent mining law in Kenya, which aims to provide clarity on revenue sharing with local communities. Nyaga expressed satisfaction with the provisions of the law, especially in terms of allocating government revenue to county governments and communities affected by mining operations. The new law also addresses artisanal mining, establishing a legal framework for this sector. Overall, Nyaga's insights shed light on Kenya's journey into the global oil market and the strategic steps being taken to ensure a sustainable and mutually beneficial oil industry for the country and its people.