Govt to sign MoU to end oil trucking standoff

The ongoing crude oil transportation deadlock in Turkana is costing Kenyan tax payers up to Ksh10 million a day according to the state department of petroleum.

This has seen at least Ksh300 million lost since the blockade started on June 27 which saw Tullow Oil on Wednesday announce it had shut down operation in Kenya until a memorandum of understanding is signed to resolve the standoff.

The MoU seeks to curve out a dispute resolution mechanism to avoid future disruptions that could affect oil operations.

Petroleum principal secretary Andrew Kamau on Thursday announced that the government had concluded negotiations on the resumption of the early oil pilot scheme (EOPS) setting out terms of engagement between residents, Tullow Oil and the county government.

“Today the cabinet secretary’s in Lodwar and will be going to more meetings in Lokichar to socialize the agreement with the leaders. If all is agreed, he expects the deal to be signed on Friday. If we sign by Friday, by next week we should have things back to normal,” Mr Kamau said.

In the draft MOU seen by Citizen Digital, both the members of parliament for Turkana South and East will be required to support the resumption of the contractor’s operations by conducting baraza forums within their constituencies with an aim of sensitizing their constituents on the benefits of the project.

This as the ministry of petroleum moves to establish a grievance and management committee consisting of the relevant representatives from the state, county, contractor and community to allow for the re-dress of grievances in a respectful and non-confrontational manner.

This role will be bolstered by the formulation of a national steering committee to handle escalations from the grievance and management delegation.

The signing of the MoU will be witnessed by the Ministry Of Petroleum and Mining and the Ministry Of Interior.

Despite the cost burden so far, PS Kamau said the loss from the deadlock has enabled the ministry to foresee challenges ahead of the expected commercialization phase.

“Imagine we are only incurring a cost of $100,000 (Ksh10m) per day due to the delay. If we had brought all the oil rigs to Turkana and started building the pipeline, the loss per day would be a lot more and it is important that we iron out these issues now before we go into full field production,” the PS said during the launch of the second quarter Petroleum Institute of East Africa industry report.

The costs cost however could go higher as the resumption of the tracking of the early oil could take up to two weeks once calm is restored in the area.

Story by Mumbi Warui & Kepha Muiruri