Kenya to go ahead with the pipeline plan despite the fall of oil prices

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Kenya is in a move to build a pipeline worth Sh121.45 billion from Lokichar to Lamu in an attempt to boost oil exports despite the clear fall of oil prices in the global market.

According to estimates, the State Department for Petroleum is set to spend another Sh777.5 million for feasibility studies, research, project preparation and design for the project. Also, another Sh 648.5 million for the next financial year starting July 1 on the oil pipeline (project S).

The pipeline construction is expected to be complete in the second half of 2023 and not June 2022.

“We can conclude the award to EPC (Engineering, procurement and construction) contractor in the second or third quarter of the year and begin construction then,” said Andrew Kamau, Petroleum PS.

The project is in a joint partnership between oil companies’ consortium of Tullow Oil Kenya B.V, Total Oil, the Kenya government and, Africa Oil Turkana Ltd.

Experts believe for such investments to be supported the international price of oil need to rise above $50 a barrel. In the recent sales, the price per barrel has hit below $30 (ksh3000) which has raised concern over the viability of a capital-intensive infrastructure for the country.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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