Trade knowledge / Kenya Announces Entrance Into Oil Industry
Date: 2016-08-19
Kenya Announces Entrance Into Oil Industry
Michael Ronayne
In 2012, the UK-based oil exploration company, Tullow Oil, discovered oil in Kenya's northwestern Turkana region. Over four years later, the country is now announcing its plans to go forward with the production of crude oil.
Part of the reason for the delay is the difficulties the company encountered soon after discovering the oil. Sheep and cattle farmers in the region were upset with the company's exploration efforts, citing damaged pastures that could destroy their livelihoods. After disorderly demonstrations by the locals, subsequent peace talks with local government leaders resolved the issue.
Kenya is believed to be sitting on an oil field of as much as 750 million barrels of the non-renewable resource. The newly announced plan calls for eventually producing 4,000 barrels per day. That works out to over 500 years of drilling at maximum capacity.
Worldwide, crude oil is being produced at record levels. Despite this, the International Energy Agency has stated that production is falling behind demand. As oil prices are recovering from their incredibly steep decline, Kenya may be choosing just the right time to enter the market.
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