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Kenya's early oil exports not viable, says report

Xinhua, October 11, 2016 Adjust font size:

Kenya's early oil exports will be a loss-making venture, a report released in Nairobi on Tuesday revealed.

According to the report by Kenya Civil Society Platform on Oil and Gas, Kenya's decision to export over 900,000 barrels of oil through road and rail will result in more cost than benefit.

"The cheapest way to transport oil is through pipeline and so Kenya should only export its crude once the pipeline is complete," says the report dubbed Early Oil from Marginal Benefits and Unacknowledged Costs.

The findings show that overall costs to export the oil through road and rail will be approximately 63 million U.S. dollars against projected revenue of 34 million dollars and 43 million dollars depending on the international oil price.

The East African's nation Early Oil Production Scheme proposes to transport crude oil by truck from Lochikar basin to Eldoret, a distance of 320 kilometers.

Thereafter the crude oil will be loaded into railways to be transported to the port of Mombasa.

The study indicated that there is sufficient oil in the Lokichar Basin to support the construction of an independent oil pipeline.

According to the ministry of energy and petroleum, the construction of an oil pipeline will be completed in 2021.

Early this year, the government floated a tender for engineering design for the pipeline from Lokichar basin to the Mombasa. Endit