US to help Kenya finance pipeline project

The US government says it will help Kenya get the financing it needs to build a billion dollar pipeline from the oilfields in the country’s northwest to its southeastern Indian Ocean coast to help it become a net exporter of oil.

The pipeline would run almost 500 miles from Lokichar in Kenya’s Great Rift Valley to the coastal town of Lamu.

The pan-African financial institution Ecobank Transnational Inc. says it has proven reserves of about 1 billion barrels of crude oil, but the London-based energy company Tullow Oil Plc, which already has discovered 600 million barrels of crude in the South Lokichar Basin alone, has yet to begin drilling there because of the persistent low price of oil.

In order to get the project moving, US Ambassador Robert Godec met last week with Kenya’s energy secretary, Alfred Keter, telling him that Washington would help Nairobi find the US$18 billion it will need to build the pipeline.

“Kenya needs US$18 billion worth of financing [for building the pipeline],” Godec said after the meeting, “so one of the questions we are discussing is how we can work together with the private sector and governments to raise that sum, to find ways to make certain that this financing become available.”

Keter said he hoped the US commitment to financing the pipeline would end Tullow’s reluctance to begin drilling in an oil-rich area and help the Kenyan government keep its promise to modernise the country.

Keter said Kenyans were indeed keen to begin benefitting from oil discoveries made on their land and was cognisant that extraction is a capital intensive affair and would require partnership.

Edited from various sources by Elizabeth Corner

Sources: Oil Price, Wall Street Journal, All Africa

Read the article online at: https://www.worldpipelines.com/project-news/11012016/us-to-help-kenya-finance-pipeline-project/