De­ci­sion on pipe­line route could strain Kenya, To­tal re­la­tions

The East African - - NEWS - By KENNEDY SENELWA Spe­cial Cor­re­spon­dent

DIF­FER­ING VIEWS on the route the crude oil ex­port pipe­line from South Lo­kichar in north­west­ern Kenya to the In­dian Ocean shore­line should take, could strain re­la­tions be­tween the gov­ern­ment, To­tal and other part­ners, an in­dus­try lobby has warned.

The Kenya Civil So­ci­ety Plat­form on Oil and Gas said the en­try of To­tal SA into the on­shore blocks 10BB, 13T and 10BA could ei­ther be sup­port­ive or disruptive.

The lobby group said re­la­tions be­tween To­tal and Kenya could be strained if the French firm opts to push for build­ing a crude pipe­line from South Lo­kichar to Hoima in western Uganda to join the $3.55 bil­lion East Africa Crude Oil Pipe­line from Hoima district in Al­ber­tine Basin to Tan­za­nia’s Tanga port.

“At­tempts by To­tal to push Kenya to join EACOP are likely to be re­buffed due to the coun­try’s com­mit­ment to the Lamu Port­south Su­dan-ethiopia-trans­port (LAPSSET) route,” said Kenya Civil So­ci­ety Plat­form on Oil and Gas’s co-or­di­na­tor Charles Wan­guhu.

Kenya opted to build a $2.1 bil­lion crude pipe­line of about 855 kilo­me­tres from Lo­kichar to Lamu port. Build­ing a 1,451-kilo­me­tre pipe­line from Hoima through Lo­kichar to Lamu would have cost $5 bil­lion.

In 2016, To­tal played an instrumental role in Uganda’s de­ci­sion to build the East Africa Crude Oil Pipe­line. The South Lo­kichar basin in acreage L0BB and 13T has 750 mil­lion bar­rels of crude.

Last month, To­tal signed a deal to ac­quire a 25 per cent stake in block 10 BB, 13T and 10BA in Kenya, buy­ing out Maersk Oil.

To­tal’s chief ex­ec­u­tive of­fi­cer Pa­trick Pouyanné said a $7.45 bil­lion shares-for-debt swap for ac­quir­ing the Nor­we­gian firm is ex­pected to close in the first quar­ter of 2018.

“We will have an op­por­tu­nity to bet­ter dis­cover and un­der­stand how we can de­velop th­ese promis­ing on­shore dis­cov­er­ies in Kenya, which will be­come a core area for To­tal,” he said in an e-mail.

Tul­low Oil Plc owns a 50 per cent stake of three blocks in Kenya, while Africa Oil Cor­po­ra­tion owns a 25 per cent stake. To­tal, Tul­low and China Na­tional Off­shore Oil Cor­po­ra­tion (CNOOC) own stakes in Uganda’s Al­ber­tine basin.

We will have an op­por­tu­nity to bet­ter dis­cover and un­der­stand how we can de­velop th­ese promis­ing on­shore dis­cov­er­ies in Kenya,” To­tal CEO Pa­trick Pouyanné

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