Kenya cuts oil export target to 400,000 barrels per year

Kenya has cut its crude oil export projections to 400,000 barrels per year between 2021 and 2023 in what signals a depressing assessment in the international market.

That forecast is lower than this year’s shipment target of 500,000. Petroleum Principal Secretary Andrew Kamau said the government will focus on field development and construction of a crude pipeline, hence the cut in export plans.

“The ministry projects to export some 400,000 barrels of crude annually for the Financial Year 2020/2021, 2021/2022 and 2022/2023. We are going to concentrate on the development of the oilfields and the pipeline,” Mr Kamau said on Thursday during the ongoing public hearings on 2020/21 sector budget proposals.

The unfulfilled development and construction of the pipeline is expected to pile financial pressure on the government and its partner Tullow Oil, whose financials have been fading in the recent past.

Tullow, the British oil explorer, has already cut its capital expenditure for its Kenyan operations by 43 percent for this year with some Sh4.06 billion allocated compared to last year’s outlay of Sh17.6 billion.

The government’s conservative estimate on crude export adds to the complexity on the controversial project that involves trucking of crude oil from Turkana to Mombasa with the first consignment of 250,000 barrels sold to a Chinese oil multinational in August 2019.