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Kenya-Uganda oil deal | East African Court of Justice

Inside Kenya-Uganda oil impasse: Is Kenya revenging the Tanzania pipeline?

Countries
  • Uganda has moved to the East African Court of Justice (EACJ) over alleged Kenya's move to block it from importing its refined petroleum products.
  • In 2016, Uganda opted to work with Tanzania to develop a pipeline to evacuate crude oil from its fields in Hoima, western Uganda.
  • This dealt a blow to an initial plan to jointly construct a 1,500-kilometre-long pipeline from oil-rich Hoima to Kenya’s Lamu port, a project envisioned to cost about $2.5 billion.

Kenya’s fallout with Uganda on importing refined petroleum products has caused another rift between the neighbouring countries, threatening trade and bilateral relations.

On December 28, last year, Kampala lodged a case at the East African Court of Justice (EACJ) against Nairobi for blocking its plans to shift from purchasing petroleum products from Kenya to importing consignments.

Over the year, Oil Marketing Companies (OMCs) in Uganda have picked imports from Kenya Pipeline’s depots in Eldoret…

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operations featured

Kenya Abandons Dream to Revive Defunct Oil Refinery

Countries
  • The country’s petroleum products distributor, Kenya Pipeline Company (KPC), is set to take over the refinery.
  • It will utilize it for storage of super petrol, diesel, kerosene and the latest now being development of a bulk LPG (cooking gas) reserve.
  • The Kenya Petroleum Refineries Limited was originally set up by Shell and British Petroleum Company BP to serve the East African region in the supply of a wide variety of oil products.

Kenya plans to fully turn its defunct oil refinery into a storage center for imported products, as the dream of refining its own crude oil fades ahead of commercial production projected to commence before 2027.

Both the government and British exploration firm, Tullow Oil, which is seeking joint ventures for the Turkana oil project, are hopeful Kenya will go into commercial oil production in the short-term.

However, it is now clear that the country has no plans …

Kenya oil project

Kenya seeks private sector backing for oil dream

Investing
  • Kenya is putting together incentives that could help mobilize Foreign Direct Investments in upstream oil activities.
  • The latest developments add to efforts by the government to support Tullow Oil in scouting for investors for Project Oil Kenya.
  • India and China are some of the countries where the government is keen on in tapping from.

In May 2023, an announcement by British oil explorer Tullow Oil that it wants out of Kenya's oil dream send shockwaves in the industry as its move threatened to derail the country's journey of becoming a net oil exporter.

At that moment, Tullow Oil partner, a Canadian firm Africa Oil Corp had left the project on concerns over difficulties in finding an investor, who can support Kenya's commercial oil export business.

The other partner TotalEnergies is fast shifting investment focus to oil producing fields in other markets. For Kenya to evacuate its crude, it has to…

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The Kenyan government and its Joint Venture Partners: Tullow Kenya, Total and Africa Oil Corp, have signed Heads of Terms for the development of Kenya’s oil fields in South Lokichar Basin, where oil exploration and production has been ongoing on small scale. Also factored in the agreement is the construction of Kenya’s oil pipeline linking the oil fields to the Lamu Port, where the government is constructing the country’s second major sea port after the Port of Mombasa. The government signed an Early Oil Pilot Scheme agreement with Joint Venture Partners in 2017 allowing all upstream contracts to be awarded, including trucking of 600 barrels of oil per day to Mombasa ready for exports.

Kenya strikes local oil deal ahead of exports

Kenya

Kenya has made a major step in the commercialisation of its oil ahead of planned exports which will see the East African nation become a major net oil exporter in the region.

In the latest developments, the government and its Joint Venture Partners: Tullow Kenya, Total and Africa Oil Corp, have signed Heads of Terms for the development of the oil fields in the northern part of the country (South Lokichar Basin-Turkana), where exploration and production has been ongoing on small scale.

These Heads of Terms capture all of the key commercial principles related to the implementation of ‘Project Oil Kenya’ and provides both the framework and commercial certainty required to draft the fully termed upstream and midstream agreements, ahead of a Final Investment Decision(FDI).

This is a major and important milestone towards reaching a FDI.

Oil blocks and pipeline

Under the deal, all parties have agreed that the Amosing, …