The Kenya Civil Society Platform on Oil and Gas (KCSPOG) wants the Early Oil Pilot Scheme (EOPS) recently rescheduled for September cancelled, saying that its implementation will see the government lose up to Sh4 billion.
The stance by the lobby group puts Kenya’s hopes to be the first East African country to export oil in a limbo, after Energy Cabinet Secretary Charles Keter recently postponed the June takeoff by three months.
The lobby group insisted there are serious risks to the pilot scheme notwithstanding the government’s plan to halt it, adding that use of an Early Oil Pilot Scheme is not necessarily standard practice in the petroleum development.
It cited poor infrastructure, high unmet expectation from local communities and possibility of election violence in the country as some of risks and uncertainties.
It want the government to finalise the Petroleum Bill through a process that ensures effective participation of the public, disclose any production sharing contracts related to full field development and the EOPS.
It further want the state to reconsider the EOPS through a well thought out cost and benefit analysis that takes into account the targeted production levels and the oil price.
The statement to media houses stated in part that, the government should instead concentrate on full field development as the EOPS, aside from testing the market,is not economically viable.
The government had in August last year set a June 30 deadline for the first batch of oil to leave Kenya. In March, government gave Tullow Oil, Africa Oil and Maersk Oil thego ahead to transport crude oil from Lokichar in Turkana to Mombasa through road and rail
The government is planning to complete construction of the pipeline by 2020 when it targets one billion oil barrel mark from the 750 million barrels registered last year.
However last week, the Ministry of Energy said, that will now only be possible after the August General Elections when the Senate approves the Petroleum Bill.
The original law had stipulated that the local people get five per cent of the revenue share, while the County Government receives 20 per cent and the National Government retains 75 per cent. The local community is advocating for a 10 per cent share of the total revenue.