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Kenya set to begin production of up to 4,000 oil barrels daily

Xinhua, August 12, 2016 Adjust font size:

Kenya has approved plans for the development and commercialization of early crude oil, joining the ranks of oil producing countries.

A statement issued by the Presidency on Thursday night said the Cabinet had approved the transportation of up to 4,000 barrels of oil per day by road and rail from northwest Kenya to the port city of Mombasa for refining.

"Under this arrangement, the country will commence with the production of 2,000 to 4,000 barrels per day which will be initially transported to Mombasa for refining," the statement said.

The move will facilitate the creation of an international market where the Kenyan government can sell crude oil.

Analysts say this might also help reduce the price of fuel in the East African country to the benefit of consumers affected by high cost of living.

The Kenya Petroleum Refineries Limited (KPRL) has 45 tanks for various products with a total networking capacity of over 484 million liters, 17 of the tanks are meant for refined products which can be heated and converted into crude oil storage tanks.

British oil exploration firm Tullow Oil has discovered approximately one billion barrels of crude oil in the South Lokichar basin in northwest Kenya.

Experts say Kenya has a huge mineral potential but its exploration efforts have only picked up pace in the last seven years with the awarding of commercial licences in prospecting for oil, gold, coal, geothermal and rare earths.

Officials said the discovery of the commercial quantities of oil in Turkana, one of the poorest communities in Kenya, will help lift the standard of living for the local communities.

The Cabinet said the first crude oil in Kenya will be refined at the Kenya Petroleum Refinery in Mombasa, which has now been fully acquired by the government through the Kenya Pipeline Company.

No timelines were given for the oil production but upgrade work is underway on a road linking the western city of Eldoret to the oil fields of Lokichar in Turkana which will be used for transportation.

The Cabinet also approved the development of the Lokichar to Lamu Crude Pipeline which will be the main transportation route for the crude oil.

Kenya had initially planned to partner on the pipeline with Uganda which has tapped into its own oil reserves but the latter preferred to evacuate its oil through Tanzania.

Kenya however has alternative plans to use road and rail to transport the crude oil from Lokichar before coming up with new designs for a pipeline. Endit