United States Eyes Kenya’s Energy Deals Worth $14 – $18 Billion

The United States is hoping to invest in the nascent oil and gas sector in Kenya including an export pipeline expected to transport crude oil from the Lokichar basin to the Lamu port.

The United States through its ambassador Bob Godec yesterday met newly appointed energy and petroleum cabinet secretary Charles Keter with the pipeline forming a basis of the discussions.

“Commercially viable oil reserves were discovered in 2012 but to date nothing has happened which makes Kenyans wonder what happened. We are confident that the PowerAfrika initiative will help us realise our pledge to Kenyans,” Keter said.

To this end the ambassador said the U.S was ready to secure 1.4 billion shillings ($104 million) for funding needed for the construction of the pipeline as well as power generation with its arm USAID having said it was ready to fund power generation from gas fired stations.

The energy cabinet secretary says extra funds will be sourced through the Export-Import Bank.

The development could be a culmination of government efforts to attract US based investors in the oil and gas sector which saw Kenyan President Uhuru Kenyatta meet with a number of American based companies during his trip in 2014.

Tullow Oil and its joint venture partners Africa Oil and Maersk Oil have to date discovered 600 million barrels of oil in Kenya’s Lokichar basin and is currently fast tracking plans to evacuate it even through the road and rail networks as the pipeline is expected to take a longer period to construct.

Kenya first discovered oil at the Ngamia fields in 2012 and has gone to discover other fields including Amosing, Twiga, Loperot, Ewoi, Etuko and Etom.

A number of U.S companies are currently involved in oil and gas exploration in Kenya including Erin Energy, ERHC and Anadarko. Another U.S company Marathon Oil announced the sale of its Kenyan assets although the new investor is yet to be announced.

Houston based Erin Energy holds the largest exploration acreage by any IOC in Kenya. Erin was awarded 4 Production Sharing Contracts in the Lamu Basin of Kenya for a combined acreage of 36,913 km2. Block L1B is onshore, block L16 is along the coast and is partly onshore and partly offshore in shallow water. Blocks L27 and L28 are located offshore in the ultradeep water of the Indian Ocean.