Kenyan Crude Oil is Economically Viable but at a Lower Price

When oil fields were discovered in Turkana County, people sung and danced with joy for they knew that a new economic dawn for Kenya had come.

Soon after the discovery, the already forgotten Turkana Land started receiving visitors from all over, some coming for job, some coming to invest, some coming to stay and some coming just to confirm.

Economic analysts however warned that the oil fields were not to benefit Kenyans as soon as it was expected simply because of the rapid falling prices of crude oil globally.

The economic analysts also said that the companies exploiting the oils had to recover their costs and make profits and that for the oil to benefit Kenyans, then that had to take years, with some estimating the duration to be ten years.

The situation is prone to be made worse as Tullow Oil, the explorer from the United Kingdom announced that Kenyan Crude oil can be economically viable at a cost of  25 US Dollars this being 5 US Dollars bellow the global crude oil prices.

The current global price for crude oil is 30 US Dollars per barrel after coming down from 37 US Dollars per barrel making it the lowest oil price per barrel in a period of eleven years.

According to Tullow, the Kenyan crude oil has a relatively low cost of development as well as production and that the best it could go is 25 US Dollars per barrel.

The price given by Tullow is an estimate but the full price will be given once a field development plan is complete. Currently, it is not even known if local production is viable and an investment decision is yet to be made and that, according to Tullow, will come out at the end of this year.

The best Kenyans can do at the moment is to watch and wait.

Article by Juma Fred.