Kenya’s Parliament Faces Tight Deadline to Review South Lokichar Oil Development Plan
The Kenyan government has mounted a vigorous defense of its decision to approve the South Lokichar Field Development Plan, arguing that the project is legally sound, economically viable, and critical to unlocking the country’s upstream petroleum potential. Energy and Petroleum Cabinet Secretary Opiyo Wandayi outlined the rationale behind the approval during a joint sitting of parliamentary energy committees, but lawmakers are racing against a tight deadline to complete their review.
Baringo Senator William Kisang, co-chair of the joint committees, emphasized the urgency of the parliamentary review process, noting that lawmakers must table a report before February 24, 2025. National Assembly co-chair David Gikaria warned that delays could result in Parliament losing its input in the process, as the committees have just 60 days to gather public views and present them to both Houses for consideration. If overtaken by time, the plan would be ratified without parliamentary input.
Wandayi explained that the plan complies with the Petroleum Act of 2019 and the Constitution, noting that commercial oil fields had been established in Blocks T6 and T7 but were marginal when considered independently. As a result, a joint development strategy was adopted to improve economic viability and operational efficiency. The joint development ensures optimal utilization of infrastructure, including a shared central processing facility, and aligns with international industry best practices, according to the Cabinet Secretary.
The South Lokichar Basin hosts an estimated 2.85 billion barrels of stock tank oil initially in place, with recoverable resources estimated at 429 million barrels over the life of the project. The most mature fields include Ngamia, Ekales, Amosing, and Twiga.
A key point of contention has been the increase of the cost recovery ceiling to 85 percent for both blocks, up from 55 percent for Block T6 and 65 percent for Block T7. Wandayi said the adjustment was necessary to attract financing for the capital-intensive project, which has struggled to secure strategic partners due to its marginal nature and shifting global investment away from hydrocarbons. He noted that comparable petroleum-producing countries such as Angola, Cameroon, and Ghana allow cost recovery ceilings between 85 and 100 percent, adding that Kenyan law does not prescribe a fixed limit.
The government has also retained a 20 percent participation interest in the project, meaning it will contribute proportionately to development costs if it elects to take up the stake. Parliament is expected to deliberate on the Field Development Plan and Production Sharing Contracts before making a decision on ratification. The joint committee will conduct public hearings in Turkana, West Pokot, Lamu, Mombasa, Trans Nzoia, and Uasin Gishu counties starting tomorrow.
Source: allafrica.com through capitalfm.co.ke
