Kenya’s oil and gas industry

GlobalData has said that the economic fallout from the recent terrorist attacks in Kenya is still unfolding and the country’s petroleum industry will have to focus its attention on security in order to keep the industry afloat.  These comments have been said by John McCormack, GlobalData’s Lead Analyst for Sub Saharan Africa. He believes that whilst the Somali extremist group Al-Shabaab has not made any threats to the petroleum industry, as it is of major importance to Kenya’s economy, it is a feasible target for attacks.

The recent Kenyan attack

‘Although the attack on the Westgate Mall is likely to have a minimal impact on the overall pace of Kenya’s oil and gas operations, most International Oil Companies (IOCs) will have to invest in security, especially with the relocation of high numbers of expatriates to Kenya. Additionally, there will also be a heightened risk of damage to oil and gas infrastructure, such as pipelines. These are particularly different to secure from Somali militants,’ said McCormack.

The oil and gas industry

GlobalData have forecast have first oil production from blocks 10BB/13T in Kenya will be achieved in 2016, as oil and gas legislative measures and infrastructure need to be developed. The domestic government is expecting revenues of US$ 300 million/y from oil produced from these blocks over the next 30 years.

Kenya safety and security

According to GlobalData Kenya doesn’t have a safety and security master plan in place to protect the country’s oil and gas infrastructure. Yet, Kenya Petroleum Refinery Corporation has tightened its security at the Mombasa refinery as a result of the Mall attack. Also, security personnel and guards have been deployed to onshore and offshore blocks that are home to ongoing exploration operations.

‘The Kenyan government may lose some of its contract negotiating powers with the IOCs as a result of the deteriorating security conditions in the country. However, although the Westgate Mall attack will cause investors to consider the future ramifications of terrorism in Kenya, the opportunity cost of turning down investment in the country is likely too high to justify not pushing forward,’ concluded McCormack.

Adapted from a press release by Claira Lloyd.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/22102013/kenya_oil_and_gas770/